U.S. average retail pump prices for diesel prices dipped downwards this week while gasoline prices increased, though demand for both motor fuels is still expected to remain flat for 2014, according to data tracked by the Energy Information Administration (EIA).
The agency said national average retail pump prices for diesel declined 1.8 cents to $4.003 per gallon after rising 5/10ths of a penny last week. Diesel prices are down 4.4 cents per gallon compared to the same week in 2013, EIA noted.
Diesel prices declined in all U.S. regions, the agency added, with New England recording the biggest drop (4.9 cents to $4.313 per gallon) followed by the Central Atlantic area (3.9 cents to $4.314 per gallon; the highest price for diesel in the U.S. this week.) However, EIA pointed out that those price marks are 10.9 cents and 17.4 cents higher per gallon, respectively, when compared to the same week in 2013.
By contrast the Gulf Coast remains home to the lowest price for diesel in the U.S. at $3.803 per gallon, the agency said; a decline of 1.9 cents versus last week and down 18.6 cents per gallon compared to the same week in 2013.
Average retail prices for gasoline, however, increased 3.5 cents this week to $3.547 per gallon, adding up to a two-week price spike of 6.8 cents a gallon, according to EIA’s data. Yet this week’s national average price remains 14.9 cents per gallon cheaper versus the same week in 2013, the agency pointed out.
Gasoline prices increased in every region of the U.S. this week except for the central Atlantic, where prices dipped 4/10ths of a penny to $3.593 per gallon.
Gasoline prices were highest on the West Coast (when including California) this week, rising 3.5 cents to $3.810 per gallon (though that’s 19.7 cents per gallon cheaper versus the same week in 2013), while the Gulf Coast remained home to the cheapest gasoline at $3.283 per gallon; up 3.1 cents per gallon week-over-week but down 23.9 cents per gallon compared to the same week last year.
According to EIA’s Short Term Energy Outlook released last week, motor gasoline consumption grew by 90,000 barrels per day (bbl/d) or 1.1% last year; the largest increase since 2006 and due largely to stronger-than-expected growth in highway travel during the second half of 2013. Distillate fuel consumption (which includes diesel fuel) also increased by 90,000 bbl/d last year, a 2.5% jump that reflected the impact of colder weather (driving up home heating oil demand) and domestic economic growth.
Yet the agency still projects consumption of liquid fuels consumption will remain flat in 2014, as motor gasoline consumption remains largely unchanged as due to a slowdown in highway travel and continued improvements in new-vehicle fuel economy that boosts overall fuel efficiency growth.
By contrast, distillate fuel oil consumption is expected to rise by 10,000 bbl/d or 0.3% this year and in 2015, total liquid fuels consumption should increase by 100,000 bbl/d or 0.5%, driven primarily by increasing transportation demand for distillate fuel oil and industrial demand for hydrocarbon gas liquids.
The agency added that temperatures east of the Rocky Mountains have been significantly colder this winter (October-February) compared with the same period both last winter and the average for the past 10 years, straining distribution networks and putting upward pressure on consumption and prices of fuels used for space heating.
U.S. average heating degree days were 13% higher than last winter (indicating colder weather) and 10% above the October through February 10-year average. The Northeast was 13% colder than last winter, the Midwest and South both 19% colder, while the West was 5% warmer.
On the plus side, though, EIA expects strong crude oil production growth – primarily concentrated in the Bakken, Eagle, and Permian regions in the U.S. – to continue through 2015, with production increasing from an estimated 7.5 million bbl/d in 2013 to 8.4 million bbl/d in 2014 and 9.2 million bbl/d in 2015.
That growth in domestic production is contributing to a significant decline in petroleum imports, the agency stressed, with the share of total U.S. liquid fuels consumption met by net imports falling to an average of 33% in 2013 after peaking at more than 60% in 2005. EIA said it expects the net import share to decline to 25% in 2015, which would be the lowest level since 1971.