Release date: November 27, 2019 | Next release date: December 4, 2019
U.S. average gasoline prices this week are similar to the previous two Thanksgivings
As U.S. households prepare for Thanksgiving and the holiday travel season, gasoline prices are similar to those in recent years. As of Monday, November 25, regular retail gasoline prices averaged $2.58 per gallon (gal) nationwide, similar to the $2.61/gal average on the Monday before Thanksgiving in 2018 and the $2.57/gal average in 2017 (Figure 1).
According to a joint forecast from the American Automobile Association (AAA) and IHS Markit, more than 55 million travelers are expected to drive 50 miles or more to celebrate Thanksgiving in 2019. This level of travel would mean 1.6 million more automobile travelers than last Thanksgiving, the most since 2005 and the 11th consecutive increase in automobile travel during the Thanksgiving holiday.
AAA and IHS Markit expect 2019 Thanksgiving automobile travel volumes—and, by extension, gasoline demand—to be higher because of economic growth. Improved macroeconomic indicators include high rates of employment, growing disposable income, strong consumer spending, and record levels of household wealth, all of which have increased since last year.
Similarly, in its most recent Short-Term Energy Outlook, the U.S. Energy Information Administration (EIA) expects the average number of vehicle miles traveled this month to be 1.6% more than during November 2018. Despite the intensity of travel during the week of Thanksgiving, people generally travel less in November than in other months of the year. According to U.S. Department of Transportation data, since 1991, vehicle miles traveled for November have averaged 13% lower than the annual average, the fourth-lowest after each of the winter months (December through February). EIA expects this trend to continue this November—albeit to a lesser degree—and forecasts that U.S. drivers will travel 8.8 billion miles per day in November 2019, 1.8% fewer than the forecast average of 8.9 billion vehicle miles traveled per day for 2019 as a whole.
Average U.S. regular retail gasoline prices have declined since their year-to-date highs in May. This decline is largely a result of a corresponding decline in the price of gasoline’s primary input: crude oil. The price of North Sea Brent—a global benchmark for crude oil and the most relevant determinant of U.S. gasoline prices—was $62.62 per barrel on November 25, 16% lower than its year-to-date high in May.
Similarly, U.S. average retail gasoline prices as of November 25 are 10% lower than their May average (Figure 2). Other factors, such as the switch to winter gasoline blends and seasonal declines in motor gasoline demand, also affect U.S. average retail gasoline prices.
Retail gasoline prices vary significantly across the United States as a result of regional supply and demand balances, gasoline specification requirements, and taxes. Gasoline prices are typically highest on the West Coast in Petroleum Administration for Defense District (PADD) 5, which has relatively limited surplus refining capacity, higher state fuel taxes, and more stringent specifications for gasoline. As of November 25, West Coast gasoline prices averaged $3.47/gal, $0.89/gal more than the U.S. average.
By comparison, the Gulf Coast region (PADD 3) has abundant refinery capacity, access to lower-priced crude oil inputs, and lower state fuel taxes. As a result, the region’s gasoline prices averaged $2.24/gal as of November 25, or $0.34/gal lower than the U.S. average (Figure 3).
U.S. average regular gasoline and diesel prices fall
The U.S. average regular gasoline retail price fell more than 1 cent from the previous week to $2.58 per gallon on November 25, 4 cents higher than the same time last year. The West Coast price fell nearly 7 cents to $3.47 per gallon, the Midwest price fell more than 3 cents to $2.40 per gallon, and the Rocky Mountain price fell 1 cent to $2.83 per gallon. The Gulf Coast price increased nearly 2 cents to $2.24 per gallon and the East Coast price increased nearly 1 cent to $2.46 per gallon.
The U.S. average diesel fuel price fell nearly 1 cent to $3.07 per gallon on November 25, 20 cents lower than a year ago. The West Coast price fell nearly 4 cents to $3.72 per gallon, the Gulf Coast price fell nearly 2 cents to $2.78 per gallon, and the Midwest price fell less than 1 cent, remaining at $2.97 per gallon. The Rocky Mountain price increased more than 1 cent to $3.25 per gallon and the East Coast price increased less than 1 cent, remaining at $3.05 per gallon.
Propane/propylene inventories decline
U.S. propane/propylene stocks decreased by 0.7 million barrels last week to 93.5 million barrels as of November 22, 2019, 5.1 million barrels (5.7%) greater than the five-year (2014-18) average inventory levels for this same time of year. Midwest, Rocky Mountain/West Coast, and East Coast inventories decreased by 0.5 million barrels, 0.3 million barrels, and 0.2 million barrels, respectively. Gulf Coast inventories increased by 0.4 million barrels. Propylene non-fuel-use inventories represented 5.6% of total propane/propylene inventories.
Residential heating fuel prices increase
As of November 25, 2019, residential heating oil prices averaged almost $3.00 per gallon, more than 1 cent per gallon above last week’s price but nearly 28 cents per gallon below last year’s price at this time. Wholesale heating oil prices averaged over $2.04 per gallon, more than 1 cent per gallon less than last week’s price and almost 1 cent per gallon less than a year ago.
Residential propane prices averaged $2.00 per gallon, 3 cents per gallon higher than last week’s price but more than 42 cents per gallon lower than a year ago. Wholesale propane prices averaged $0.90 per gallon, more than 5 cents per gallon higher than last week’s price and 4 cents per gallon above last year’s price.
For questions about This Week in Petroleum, contact the Petroleum Markets Team at 202-586-4522.
Retail prices (dollars per gallon)
| Retail prices | Change from last | ||
|---|---|---|---|
| 11/25/19 | Week | Year | |
| Gasoline | 2.579 | -0.013 | 0.040 |
| Diesel | 3.066 | -0.008 | -0.195 |
| Heating Oil | 2.997 | 0.012 | -0.277 |
| Propane | 2.000 | 0.030 | -0.423 |
Futures prices (dollars per gallon*)
| Futures prices | Change from last | ||
|---|---|---|---|
| 11/22/19 | Week | Year | |
| Crude oil | 57.77 | 0.05 | 7.35 |
| Gasoline | 1.674 | 0.039 | 0.283 |
| Heating oil | 1.929 | -0.019 | 0.053 |
| *Note: Crude oil price in dollars per barrel. | |||
Stocks (million barrels)
| Stocks | Change from last | ||
|---|---|---|---|
| 11/22/19 | Week | Year | |
| Crude oil | 452.0 | 1.6 | 1.5 |
| Gasoline | 226.0 | 5.1 | 1.4 |
| Distillate | 116.4 | 0.7 | -5.4 |
| Propane | 93.527 | -0.683 | 12.384 |