Fuel prices beat a welcome retreat

Retail fuel prices marked a decline for the first time in months this week, according to the Energy Information Administration (EIA). Diesel fell 2.9 cents to a U.S. average of $4.13 per gallon, while gasoline decreased 2.5 cents to a U.S. average of $3.756 per gallon.

As a result, gasoline is now 3.4 cents per gallon cheaper compared to the same week in 2012, the agency added; however, the same cannot be said for diesel, which remains over $4 per gallon across the country and is on average 3.6 cents more expensive per gallon compared to the same week last year.

The EIA noted, though, that diesel prices declined in every region of the country, dropping the most in the Lower Atlantic (by 3.7 cents per gallon) and the Midwest (3.6 cents). The Rocky Mountain region is home to the cheapest diesel in the U.S. ($4.047 per gallon), whereas it’s most costly California ($4.341 per gallon) followed by New England ($4.298) and the West Coast as a whole ($4.28).

Gasoline prices dropped in all but three U.S. regions, EIA said – those being the Rocky Mountains, California and the West Coast – with the Gulf Coast recording the biggest drop at 4.8 cents per gallon. Gasoline is cheapest in the Rocky Mountain region this week ($3.476 per gallon) and most expensive along the West Coast ($4.069), the agency noted.

The EIA also point out that U.S. crude oil production is now reaching new records, which might help temper fuel price fluctuations in the future.

According to the agency’s data, U.S. crude oil production exceeded an average 7 million barrels per day (bbl/d) in November and December last year – the highest volume since December 1992 – with Increasing oil production in North Dakota and onshore Texas driving that increase, which is mainly coming from shale and other tight (very low permeability) formations.

In the future, EIA said it is proposing to collect crude oil production data directly from companies in the top-producing states in order to provide a more accurate and timely assessment of U.S. crude oil production volumes.

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