WEX Says Fuel Prices Falling, U.S. EIA Predict Lower Prices Later This Year
WEXIndex Retail Fuel Price Index is a monthly publication produced by WEX Inc. with market insights provided by OPIS Energy Group.
The national average for retail gasoline has fallen 10 cents per gallon in the past month to $3.64 per gallon, according to the monthly report from WEX Inc.
This drop means the national average is down nearly 30 cents per gallon compared to last year, and WEX said that analysts forecast more drops in the weeks to come.
WEX Monthly Average
Price Per Gallon
– March 2013
|Los Angeles, CA
|New Orleans, LA
|San Francisco, CA
|St. Louis, MO
Wholesale prices are also seeing tremendous declines. U.S. crude and refined product prices are under assault this week, according to WEX, and a mixed report from the Energy Information Administration (EIA) seems to confirm suspicions that a slowdown has gripped the country in recent weeks.
Gasoline demand last week, as measured by EIA, actually rose by 124,000 b/d (barrels per day) but that reflects a poor level for a week bracketing the peak Easter spring break period.
There is a hint that demand is particularly poor across the upper tier of U.S. states in the Midwest and Northeast. The four-week average for gasoline is now 104,000 b/d behind last year, after a relatively robust February. American consumers may be beneficiaries of motor fuel
costs that are 30 cents per gallon below a year ago, but EIA stats have yet to demonstrate any measurable lift from cheaper prices.
Every state has an average below last year with Indiana showing the largest year-over-year change with prices down 41 cents per gallon. North Dakota has the smallest difference from last year with the average price off by just 12.5 cents per gallon.
Meanwhile, diesel prices nationally are hovering at $4.00 per gallon. However, demand for distillate (the product used to make diesel) dropped by a hefty 341,000 b/d on the week. The four-week average shows a gain of nearly 200,000 b/d to last year, but virtually all of that difference can be attributed to cold weather. The supposition is that there is a slump in diesel for domestic transportation usage.
Experts believe that diesel prices could see large declines, due to the spring thaw and weak demand.
The U.S. Energy Information Administration also released its latest Short-Term Energy and Summer Fuels Outlook on April 9, which predicts that regular gasoline retail prices will average $3.63 per gallon during the summer driving season. EIA also predicts that in the May 2013, the average price for a gallon of regular gasoline at retail will fall to $3.57.
For oil prices, the EIA said the Brent crude oil spot price will average $108 per barrel in 2013, which is down from $112 per barrel in 2012. The price of Brent crude did spike in February of this year to $119 per barrel but has since fallen. Looking ahead, EIA predicts that West Texas Intermediate will be roughly $14 per barrel less expensive than Brent crude, and that this price will fall further as planned new pipeline capacity could reduce the cost of moving oil from the middle of the continent to Gulf Coast refineries.
Updated 4/9/2013 with EIA Short Term Energy Outlook information.