Energize Weekly, April 24, 2019
The average summer retail price for regular-grade gasoline in the U.S. will be about 3 percent lower in 2019 than in 2018 at $2.76 a gallon, according to the federal Energy Information Administration (EIA) Summer Fuels Outlook.
The cost of gasoline is primarily driven by the cost of crude oil since distribution expenses and taxes in the U.S. are generally stable. The EIA projects that Brent crude prices will average $67 a barrel during the April to September period compared to $75 a barrel last summer. The $65-a-barrel price is the equivalent of $1.60 a gallon.
The EIA forecast has average gasoline prices starting the season in April at $2.74 a gallon and then rising to a peak of $2.83 a gallon in June before dropping to $2.66 a gallon by September.
There are also sharp regional variations with average retail prices ranging from a low of $2.51 a gallon in the Gulf Coast region to a high of $3.27 a gallon in the West Coast region.
Motor fuel production from U.S. refineries is projected to be up this summer by 80,000 barrels a day compared with 2018, with the total output at 8.6 million barrels a day, according to the EIA.
The U.S. is slated to be a net exporter of gasoline and blending components at an average of 87,000 barrels a day from April to September. This would mark the first time since 1960 that the U.S. exported more gasoline than it imported during the summer.
Consumption of motor gasoline is projected to rise about 29,000 barrels a day, three-tenths of a percent over 2018 levels, to 9.5 million barrels a day and that gasoline inventories will end the season in September at 232 million barrels, about 7.6 barrels less than last year.
Retail diesel fuels prices in the U.S, are forecast to average $3.09 a gallon this summer, 4 percent lower than last summer’s average of $3.22 a gallon.
Distillate fuel consumption, including diesel fuel and heating oil, will average 4.1 million barrels in the summer of 2019, about 20,000 barrels a day more than last summer. A key determinant to distillate consumption is trucking activity, which is linked to economic activity. The EIA forecasts slower growth in those economic drivers—economic growth, industrial output, international trade and crude oil and natural gas drilling,
One “uncertainty in the diesel market this summer” are new maritime fuel regulations promulgated by International Maritime Organization, the EIA said.
