Retail pump prices for both diesel and gasoline continued to drop across the U.S. this week, according to data tracked by the Energy Information Administration (EIA), with the agency revising its gasoline price prediction for the summer driving season down slightly compared to the previous two years.
The U.S. average retail pump price for diesel dropped 3.5 cents this week to $3.942 per gallon, which is down 18.5 cents per gallon compared to the same week in 2012, the EIA said. Prices dropped in all regions of the country, with only four areas registering prices above the $4 per gallon mark – California ($4.147), New England ($4.105), the West Coast ($4.066), and the Central Atlantic ($4.032).
The regions with the cheapest diesel fuel in the U.S. this week are the Gulf Coast ($3.852 per gallon) and the Rocky Mountains ($3.882), according to EIA’s data.
The U.S. average retail pump price for gasoline fell 6.6 cents to $3.542 per gallon this week, noted the agency, which is 38 cents cheaper per gallon compared to the same week last year.
The West Coast ($3.888 per gallon) and California ($3.709) posted the highest gasoline prices in the nation this week, while the Gulf Coast ($3.363), Midwest ($3.456) and Rocky Mountains ($3.507) were home to the lowest.
The EIA added that it now expects the retail price for regular gasoline to average $3.63 per gallon during the summer driving season (nominally April thru September) in 2013, which is slightly below average prices over the last two summers, according to the agency’s Short-Term Energy Outlook.
EIA pointed out that falling crude oil prices — which account for two-thirds of the price of gasoline at the pump — is the main reason behind the expected decline in driving-season gasoline costs this year as the average price of Brent crude oil, a benchmark price closely related to the U.S. wholesale gasoline price, is expected to average $107.50 per barrel this summer, down about $1.50 from last summer.
Decline in gasoline consumption is another factor, as consumption is expected to fall 20,000 barrels per day (bbl/d) or some 0.2%, with a 0.3% rise in highway travel more than offsetting improvements in vehicle fuel efficiency.
The agency cautioned, however, that U.S. gasoline prices vary by region, with the West Coast pump price expected to be as much as 26 cents per gallon higher this summer than the national average, while the Gulf Coast could be 16 cents per gallon lower than the national average.
Also, U.S. gasoline inventories at the start of the 2013 summer driving season registered at 220 million barrels, which is one million more barrels compared to last year, though it’s about the same as the five-year average. Although withdrawals of gasoline from inventories were a major source of supply to help meet high fuel demand last summer, the gasoline stock draw this summer is expected to be about one-half of the 98,000 bbl/d draw-down that occurred in 2012, the agency said.
EIA believes the steady drawdown of gasoline inventories seen throughout last summer is not expected to be repeated this summer, with U.S. gasoline inventories instead forecasted to stabilize by the middle of summer, and end the driving season at almost 210 million barrels, about 8.8 million barrels higher than last summer and 1.7 million barrels above the five-year average.