Diesel and gasoline prices dip downward

Diesel and gasoline prices dip downward

U.S. average retail pump prices for both diesel and gasoline declined slightly this week on a national basis, according to data tracked by the Energy Information Administration, though pump prices for gasoline witnessed an uptick in some regions of the country.

The average pump rice for diesel slid 2.4 cents this week to $3.886 per gallon, according to the agency, which is 8/10ths of a penny per gallon cheaper compared to the same time period in 2013.

Only three regions recorded prices above the $4 per gallon mark this week, EIA said: New England ($4.107 per gallon), the Central Atlantic ($4.045) and California ($4.085).

Diesel prices declined in every region of the country, with the biggest one-week drop recorded by the West Coast at 4.3 cents per gallon (which shrinks to 3.8 cents per gallon with California’s pricing removed from the mix). California and the Midwest tied for second with both sporting 3.8 cent per gallon drops in diesel prices, while the Gulf Coast recorded the cheapest average retail pump price for diesel in the country at $3.78 per gallon.

By contrast, the average U.S. retail pump price for gasoline only decreased 5/10ths of a penny to $3.327 per gallon, which is actually 2.4 cents per gallon higher compared to the same week in 2012, according to EIA’s numbers.

Prices increased in two regions of the country, rising 3.1 cents to $3.253 per gallon in the Midwest and 2.8 cents to $3.148 per gallon in the Rocky Mountains, though the Rocky Mountains’ price is the second cheapest in the nation this week behind only the Gulf Coast at $3.108 per gallon. Yet EIA noted that average retail pump prices for gasoline dropped in every other area of the U.S. this week, with the biggest one-week decline registered by California at 3.2 cents per gallon.

The agency noted, however, that its data analysis for gasoline prices indicates that retail prices for regular grade gasoline moved in tighter ranges in 2013 than in previous years.

Changes in retail gasoline prices can be attributed to factors that include crude oil prices, refinery outages, inventory levels, and seasonal fuel-specification changes. Lower crude oil prices were the main driver behind lower gasoline prices in 2013, EIA stressed, with an average retail price of regular gasoline of $3.50 per gallon for the year, 11 cents per gallon lower than in 2012.

Two regions in the country registered average retail pump prices below $3 per gallon for several weeks at a time during 2013. However, the weekly U.S. average price did not drop below $3 per gallon for the third calendar year in a row, reaching a low of $3.19 per gallon on November 11 and a high of $3.78 per gallon on February 25.

On the East Coast, retail gasoline prices peaked in late February last year when refinery outages, rising crude oil prices, and the announcement of a refinery closing sent prices briefly higher. Yet in New York City and Boston, along with the rest of the country, gasoline prices starting declining soon thereafter, hitting the low point for the year in early-November at $3.27 per gallon. Prices in Miami, meanwhile, came close to passing $4/gal several times in 2013, reaching $3.99 in February, before trending downward in the last three months of the year.

The agency’s data also indicated that Midwest retail gasoline prices varied the most of any region in 2013, with prices in Chicago ranging $1.11 per gallon from the highest to the lowest price over the course of the year. Prices in Chicago peaked in early June at $4.36 per gallon after a series of refinery outages led to a draw down in inventories and drove prices up across the Midwest. By November, with refineries back on line and the return of the BP Whiting refinery in Chicago from a long-term upgrade, Midwest prices trended lower at $3.24 per gallon.

EIA found that Gulf Coast retail gasoline prices trended lower than the rest of the country for much of 2013, reaching a high of $3.61 per gallon in late February as a result of refinery maintenance outages, the lowest peak of any region this year.

Refineries in the Gulf Coast have run at high levels in order to maximize diesel production for the global market, but they have produced gasoline at the same time. The resulting increase in gasoline supplies allowed gasoline prices in the Gulf Coast to be the lowest in the country for most of the year, dipping below $3 per gallon several times in early November to $2.94 per gallon on November 11. The additional gasoline supplies have also led the Gulf Coast to increase gasoline exports to Latin American and West Africa.

Prices in Denver during 2013 went from a low of $2.81 per gallon in late January, the lowest price in the country recorded last year, to a high of $3.56 per gallon in late February. Yet thereafter, gasoline prices fell in Denver and the Rocky Mountains much like in the Gulf Coast, with refineries running to produce diesel, which resulted in the production of additional gasoline supplies.

Finally, on the West Coast – which includes Los Angeles, San Francisco, and Seattle – far narrower price ranges for gasoline developed during 2013 compared to previous years, with high-low price spreads of 63 cents, 77 cents, and 74 cents per gallon, respectively.

In California, which tends to drive gasoline price trends on the West Coast, inventories were generally higher in 2013 than in 2012, with demand flat or decreasing. In contrast to typical outcomes, the record for the highest gasoline price in EIA's weekly survey in 2013 was not a West Coast city. That honor goes to Chicago's peak EIA survey price of $4.36 per gallon on June 10, which exceeded high water marks even in Los Angeles, where prices reached $4.34 per gallon on February 25 last year

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