Released on April 6, 2005
(Next Release on April 13, 2005)

The New and the Familiar
On Monday, April 4, many baseball fans in the Washington, D.C. metropolitan area shared a new experience: rooting for a hometown Major League Baseball team. For the first time since the fall of 1971, a team based in Washington, D.C. played an official Major League game (even though it should be noted that much like the previous Washington baseball teams, they lost). This year, Washington, D.C. area motorists are also sharing another experience that is familiar to everyone throughout the country, as retail gasoline prices are once again rising sharply as spring begins.

Since the beginning of this decade, there has been at least one substantial increase in retail gasoline prices during the first half of each year (see red highlighted sections in the graph below). So it should not be too much of a surprise that prices have already increased significantly this year. With the Energy Information Administration’s (EIA) weekly retail gasoline price survey (published each Monday by 5:00 p.m. Eastern Time) showing a national average price for regular gasoline at nearly $2.22 per gallon, the average price has already increased by about 44 cents per gallon this year. And as noted in last week’s edition of This Week In Petroleum, we expect retail prices are expected to continue to rise for at least the next few weeks.

One question many motorists would like answered is: How high will prices go this year? To help inform the public and policymakers on such questions, EIA publishes its monthly Short-Term Energy Outlook, which forecasts demand, supply, and prices for U.S. energy markets, as well as the global oil market supply and demand balance. Additionally, twice a year, EIA produces a supplemental section in the Short-Term Energy Outlook. In October, EIA publishes its Winter Fuels Outlook, which takes a detailed look into the major heating fuels (heating oil, natural gas, propane, and electricity). This month (and every April), EIA publishes its Summer Motor Gasoline Outlook, which takes a detailed look into what motorists can expect over the summer period, including a forecast of average monthly retail gasoline prices. Motorists and gasoline analysts interested in knowing how high EIA expects retail gasoline prices to climb on a monthly average basis, will want to read this year’s Summer Motor Gasoline Outlook, which will be released on EIA’s web site at 8:30 a.m. Eastern Time on Thursday, April 7. But unlike fans of the new Washington Nationals, who are enjoying a hometown baseball team for the first time in 34 years, motorists won’t find much to cheer about in this summer’s gasoline outlook.

U.S. Average Retail Gasoline Price Increases by Over 6 Cents
The U.S. average retail price for regular gasoline increased this week by 6.4 cents from the previous week to reach 221.7 cents per gallon as of April 4, 43.7 cents higher than this time last year. This is the third week in a row that prices have achieved a new all-time high (not adjusted for inflation) and the seventh week in a row that prices have increased. Prices rose throughout the country, with the West Coast seeing the largest regional increase of 8.0 cents to reach 239.8 cents per gallon, remaining the highest regional price in the country. Prices in California gained 8.8 cents to 246.4 cents per gallon. Retail prices on the East Coast gained 6.5 cents to 218.5 cents per gallon, which is 44.2 cents higher than last year.

Retail diesel fuel prices gained 5.4 cents last week to 230.3 cents per gallon, reaching a new highest price ever recorded (not adjusted for inflation) for the third week in a row. Prices were up throughout the country, with the West Coast and Gulf Coast each rising 5.8 cents to average 254.1 cents per gallon and 224.0 cents per gallon, respectively. Average diesel fuel prices in California increased by 6.9 cents to reach 258.1 cents per gallon, which is 56.7 cents higher than this time last year.

March Propane Stockdraw Second Highest Ever
Unseasonably cold weather and apparent continued strong petrochemical feedstock demand for propane combined to record the second highest stockdraw ever for March, as inventories plunged by 5.7 million barrels during the month to an estimated 26.8 million barrels as of April 1, 2005. Colder-than-normal weather in the major propane-consuming regions in the East Coast and Midwest along with unexpectedly strong demand for propane used as a feedstock by the petrochemical industry were some of the primary factors driving inventories sharply lower during March. The strong March stockdraw also contributed to the above-average seasonal (October - March) draw on propane inventories that measured 40.4 million barrels, a level well above the most recent 5-year average stockdraw of 36.8 million barrels. Although propane inventories ended the 2004-05 heating season about 1.1 million barrels below the same period last year, inventories remain well within the normal range for this period. Regional inventories were mostly lower with East Coast, Midwest and the combined Rocky Mountain/West Coast regions showing similar declines of 0.1 million barrels, while at the same time the Gulf Coast region managed a 0.1-million-barrel stockbuild. Propylene non-fuel use inventories rose by 0.2 million barrels last week to 4.7 million barrels, accounting for a 17.5 percent share of total propane/propylene inventories.

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