National average retail prices for diesel and gasoline continued increasing this week, according to data tracked by the Energy Information Agency (IEA), with further fuel price spikes expected as oil production “disruptions” hit their highest levels in five years this May.
Diesel increased 2.4 cents to $2.431 per gallon, EIA said, though that is 43.9 cents cheaper per gallon compared to the same week in 2015.
Diesel prices increased in every region of the country this week, the agency added, with the biggest hikes occurring in the Western U.S.:
- California: up 4.5 cents to $2.791 per gallon
- The West Coast: up 3 cents to $2.711 per gallon (which translates into a 1 cent to $2.610 with California’s prices excluded)
- The Midwest: up 2.9 cents to $2.39
- The Gulf Coast: up 2.9 cents to $2.307
- The Rock Mountains: up 2.3 cents to $2.413
Gasoline prices were more mixed, according to EIA’s numbers.
The national average price for gasoline climbed 1.8 cents to $2.399 per gallon, though that is 43.6 cents cheaper per gallon compared to the same week last year, the agency said.
Gasoline prices dropped in three regions of the country while increasing in the other six. The three posting declines were:
- The Lower Atlantic: down 1.7 cents to $2.26 per gallon
- The Gulf Coast: down 7/10ths of a penny to $2.35
- The East Coast: down 6/10ths of a penny to $2.308
Yet a big 5.7 cent per gallon price spike in the Midwest, which drove up gasoline prices in that region to $2.466 per gallon, counterbalanced those regional decreases, EIA noted.
The main driver behind rising fuel prices is the increase in global oil prices, which were partly affected by greater “unplanned supply disruptions,” the agency said – a factor also touted by the International Energy Agency (IEA) in its own recent report on the subject.
Unplanned supply disruptions averaged more than 3.6 million barrels per day (b/d) in May, according to EIA; the highest monthly level recorded since the agency said it started tracking global disruptions in January of 2011.
From April to May, disruptions grew by 0.8 million b/d as increased outages – largely in Canada, Nigeria, Iraq, and Libya – more than offset reduced outages in Kuwait, Brazil, and Ghana, the agency said.
Along with other factors such as rising oil demand and falling U.S. crude oil production, the rise in disruptions contributed to a month-over-month $5 per barrel increase in Brent crude oil spot prices in May, EIA noted.
Yet the agency stressed in its latest Short-Term Energy Outlook that such global oil supply outages are expected to decrease in June because most of the recent outages are starting to subside.
"When an outage is related to weather, natural disaster, labor strikes, or technical failure/accident, the disruption usually ends within weeks or a few months, such as the recent outages caused by the wildfires in Canada and the poor weather in the Basra Gulf in Iraq," EIA pointed out.