According to the Wright Express (WEX) September fuel report from Oct. 2, retail prices rallied from their summer low point of $3.33 per gallon on July 2 to $3.87 per gallon on Sept. 14, which was the day before the official switch back to the winter grade of fuel, which tends to be cheaper. Since then, the national average has inched lower, dropping to $3.78 per gallon to start off October.
WEX said that analysts had forecasted a more robust movement to the downside after the change, but that has only happened in parts of the country. The midsection of the U.S. has seen retail prices drop between 12 and 18 cents per gallon since mid-September, but the East and West Coasts are seeing increased prices.
More refinery issues in California, for example, on top of very low inventories have that market’s prices staying high, while the East Coast has been hit by record low imports from Europe thanks to refinery holdups that have strained stocks.
The good news is that market-watchers expect imports to heat up in the next week, and the Northeast should see lower prices. The West Coast, particularly California, will likely continue to see upward pressure on prices until refineries get back to full throttle and inventories build.
Overall, experts are calling for the national average to decline with some still predicting that it may get as low as $3.50 by the end of the year. Unfortunately, that is still about 25 cents per gallon higher than where prices were last year. This means that the starting point for the annual spring spike could be at its highest level ever.
Meantime, diesel stocks internationally remain tight. Analysts expect diesel prices, which are already above $4 per gallon, to head higher — especially if the Northeast sees a cold start to the winter.
WRIGHT EXPRESS MONTHLY PPG