Gasoline and Diesel Retail Prices
The EIA release their weekly retail fuel prices report yesterday. Diesel continues their across-the-board price hikes, while gasoline showed more mixed results. These results were somewhat surprising given that NYMEX diesel prices fell by nearly a penny last week, while NYMEX gasoline shed nearly four cents. Both products have now fallen for two weeks straight at the NYMEX level. This is a good reminder that retail prices rarely pass through the savings from cheaper wholesale products.
Diesel prices rose 1.7 cents this week to average $2.598, nearly 30 cents above last week. Prices are now just 1.7 cents below 2015 levels; prices have not been above 2015 levels since November 2016. Despite several weeks of across-the-board diesel price hikes, prices have remained relatively stable, ranging between $2.46 and $2.60 for all of 2017.
The East Coast and Gulf saw the lowest price hikes, with the East Coast rising a penny and the Gulf mostly flat. Keep in mind that the majority of East Coast is fed by the Colonial Pipeline, originating in the Gulf Coast, so it should come as no surprise that these regions move similarly in price. The Midwest, Rocky Mountains, and West Coast all saw prices rise by around 2.7-2.9 cents. Interestingly, these dynamics come as PADD 1 and 2 saw a build in diesel inventories, while PADDS 3-5 saw either little movement or stock draws.
Gasoline prices were more mixed, with overall national prices rising .6 cents to reach $2.384. While 23.5 cents above prices this time last year, gasoline remains well below the 2015 levels for this time of year. As we head towards the end of summer driving season, gasoline prices at the pump will likely dip lower, in line with the 4-yr range.
Prices were driven higher by gains in the Rocky Mountains and the West Coast. The Rocky Mountains led the gains with a 3.6 cent hike. Prices in California surpassed $3 per gallon for the first time since June. Gasoline prices in the East Coast and Gulf Coast regions fell by nearly a penny, much to the relief of consumers in those areas.