Gasoline Prices Moved in Tight Range in 2013

January 14th, 2014
in econ_news, syndication

by T. Mason Hamilton, U.S. Energy Information Administration

Across the country, retail prices for regular grade gasoline moved in tighter ranges in 2013 than in previous years. Changes in retail gasoline prices can be attributed to factors that include crude oil prices, refinery outages, inventory levels, and seasonal fuel-specification changes. Lower crude oil prices led to lower gasoline prices in 2013, with an average retail price of regular gasoline of $3.50 per gallon (gal) for the year, 11 cents per gallon lower than in 2012. Two regions in the country registered average retail pump prices below $3 per gallon for several weeks at a time during 2013. However, the weekly U.S. average price did not drop below $3/gal for the third calendar year in a row, reaching a low of $3.19/gal on November 11, and a high of $3.78/gal on February 25.

Follow up:

graph of regular retail gasoline price ranges, as explained in the article text Source: U.S. Energy Information Administration, Gasoline and Fuel Update

EIA collects data on retail gasoline and diesel fuel prices each Monday across the country, publishing the data the same day. Retail gasoline prices are published for 5 regions (PADDs), 9 states, 10 cities, and the entire country. Below is a description of how prices in several regions and cities changed during the year.

East Coast (Boston, New York, and Miami). On the East Coast, retail gasoline prices peaked in late February when refinery outages, rising crude oil prices, and the announcement of a refinery closing sent prices briefly higher. In New York City and Boston, along with the rest of the country, prices fell since February, hitting the low point for the year in early-November at $3.27/gal. Prices in Miami, meanwhile, came close to passing $4/gal several times in 2013, reaching $3.99 in February, before trending downward in the last three months of the year.

Midwest (Chicago and Cleveland). Midwest retail gasoline prices varied the most of any region in 2013, with prices in Chicago ranging $1.11/gal from the highest to the lowest price over the course of the year. Prices in Chicago peaked in early June at $4.36/gal after a series of refinery outages led to a draw down in inventories and drove prices up across the Midwest. By November, with refineries back on line and the return of the BP Whiting refinery in Chicago from a long-term upgrade, Midwest prices trended lower at $3.24.

Gulf Coast (Houston). Gulf Coast retail gasoline prices were lower than the rest of the country for much of 2013, reaching a high of $3.61 in late February as a result of refinery maintenance outages, the lowest peak of any region this year. Refineries in the Gulf Coast have run at high levels in order to maximize diesel production for the global market, but they have produced gasoline at the same time. The resulting increase in gasoline supplies allowed gasoline prices in the Gulf Coast to be the lowest in the country for most of the year, dipping below $3/gal several times in early November to a low of $2.94/gal on November 11. The additional gasoline supplies have also led the Gulf Coast to increase gasoline exports to Latin American and West Africa.

Rocky Mountains (Denver). Prices in Denver during 2013 went from a low of $2.81/gal in late January, the lowest price in the country recorded this year, to a high of $3.56/gal in late February. Gasoline prices fell in Denver and the Rocky Mountains much like in the Gulf Coast, with refineries running to produce diesel, which resulted in additional gasoline supplies.

West Coast (Los Angeles, San Francisco, and Seattle). The West Coast experienced narrower price ranges for gasoline during 2013 than in previous years, with high-low price spreads of 63 cents, 77 cents, and 74 cents per gallon in San Francisco, Los Angeles, and Seattle, respectively. In California, which tends to drive gasoline price trends on the West Coast, inventories were generally higher than in 2012, with demand flat or decreasing. In contrast to typical outcomes, the record for the highest gasoline price in EIA's weekly survey in 2013 was not a West Coast city. Chicago's peak EIA survey price of $4.36/gal on June 10 exceeded Los Angeles, where prices reached $4.34/gal on February 25.

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