EIA: diesel price ties record high; average gasoline price also is up

Retail diesel prices climbed 6.3 cents last week to reach 315.7 cents per gallon, an amount equal to the all-time record high price of Oct. 24, 2005, according to the Oct. 31 edition of “This Week in Petroleum,” published by the Energy Information Administration (EIA), the statistical branch of the U.S. Department of Energy.

Regional diesel prices were all higher with the East Coast rising 7.0 cents to hit 314.8 cents per gallon, according to “This Week.” The Midwest diesel price pushed higher to 312.2 cents per gallon, increasing by 5.5 cents. The Gulf Coast gained 6.8 cents per gallon to move to 306.2 cents per gallon. The Rocky Mountain price increased to 328.1 cents per gallon, a gain of 5.2 cents. Setting a second consecutive record for the West Coast region, prices rose 7.1 cents to hit 339.4 cents per gallon. California prices were up 6.8 cents to 340.6 cents per gallon, establishing another record price for that state.

The U.S. average retail price for regular gasoline gained 4.9 cents last week to stop at 287.2 cents per gallon as of Oct. 29, 2007, 65.4 cents higher than last year. All regions were higher with the East Coast price rising 4.5 cents to 283.3 cents per gallon while the Gulf Coast rose 3.2 cents to 273.5 cents per gallon, still the lowest regional price. The Midwest price soared 7.6 cents to land at 286.4 cents per gallon. The Rocky Mountain region increased 2.8 cents to settle at 287.3 cents per gallon. The highest price in the country was on the West Coast where it reached 309.1 cents per gallon, an increase of 2.6 cents this week and 67.7 cents per gallon over last year. The average price for regular grade in California was 315.9 cents per gallon, up 1.6 cents from last week and 72.5 cents per gallon over the previous year.

In data released last week, EIA data showed crude oil imports dropping to 9.1 million barrels per day for the 7-day period ending Oct. 19, 2007. This low import level caused some concerns among analysts who watch crude oil supplies, the EIA noted in its weekly report. However, a low one week number such as this can occur when dealing with data over a 7-day period. Weekly import data are especially prone to timing fluctuations, since imports occur in discrete shipments, unlike refinery production which is a continuous-type process and, therefore, more consistent. This is not as much of an issue for monthly import data, where a longer reporting period smoothes out most timing issues.

The EIA publication advised readers, “It is important to keep [the] issue of timing in mind when assessing what any given single week’s data mean. It is best in such situations to look at the 4-week averages, which, like monthly data, tend to smooth out such one week timing issues, or other anomalies, hence, better capturing the trend underlining recent data.”

Looking at both one-week and the 4-week averages for crude oil imports for each of the last nine weeks illustrates this, the EIA said in its report. The one week crude imports numbers have fluctuated from as low as 9.1 million barrels per day (Oct. 19, 2007) to as high as 10.4 million barrels per day (Sept. 21 and Oct. 12, 2007). But the 4-week averages for the same weeks have remained in a tighter range between about 9.7 million barrels per day and 10.2 million barrels per day. The variation in the 4-week average data for crude imports has been much less than that of the one-week imports data for the same period.

Looking at recent data, it is clear that the latest 4-week average number of 9.7 million barrels per day for crude oil imports is still quite close to the narrow range around 10 million barrels per day where the 4-week average has held since the end of August, “This Week” reported. The 4-week average data for the last several months is likely a better reflection of the sustainable current, and expected near-future, levels of crude oil inflows into the United States than the one week number of 9.1 million barrels per day for the week ending Oct. 19, according to “This Week.”

Although this week’s crude oil imports were up modestly from last week’s level, both the weekly numbers and their corresponding 4-week averages show a generally declining tendency in recent weeks. Whether that direction is sustained over the following weeks remains to be seen.

What is important is that imports will have to climb to higher levels than either the current single week or 4-week average levels if crude stocks are not to decline further as refiners increase throughputs this fall following heavy maintenance.