The EIA released its weekly retail gasoline and diesel prices yesterday. Prices were mixed, with diesel prices mostly rising and gasoline prices falling. Given the precipitous rise in NYMEX prices for both wholesale and gasoline, the mixed results are somewhat surprising. NYMEX gasoline (RBOB) saw gains of roughly 4 cents, while NYMEX diesel (HO) rose 2.5 cents.
Diesel prices, which rose $.01 this week, were up in all regions except California and New England, which both saw very gently declining prices. The Midwest led in gains, with a $.017 rise over last week, with the Gulf Coast and the Lower Atlantic tying for second with $.013 rises. The West Coast was unchanged, when accounting for all West Coast states including California.
Retail diesel prices have risen to nearly 9 cents higher than their 2016 corollaries. After bouncing off annual lows in June, diesel prices have been steadily rising during the month of July. Of course, transportation companies can still be grateful that prices are lower than their long-term average.
National gasoline prices fell across the board, shedding $.019 despite the rise in NYMEX prices. Prices fell in response to across-the-board drops in gasoline basis levels. Recall that basis is the difference between regional “spot” (due for immediate delivery) prices and NYMEX “futures” (due next month) prices delivered to New York Harbor, meaning that both time and geography can drive price differences. Last week, despite rising NYMEX prices, basis levels in all regions except New York Harbor fell, ranging from two- to eight-cent losses.
Gasoline prices saw especially large drops in the Midwest, which fell 4.4 cents. Recall that last week, we reported that a refinery in Coffeyville, KS was shutdown, taking almost 5 million gallons per day of fuel off the market. The refinery resumed operations on Saturday, helping to normalize prices. Outside of the Midwest, the Rocky Mountains and West Coast both saw 1.2 cent price drops, while the East Coast was limited to drops below a penny.