The U.S. average retail price of regular gasoline decreased seven cents to $3.29 per gallon as of October 28, 2013, 27 cents lower than last year at this time, and the lowest price since December 24, 2012. Prices fell in all regions of the nation, with the largest decrease coming in the Midwest, where the price dropped 12 cents to $3.20 per gallon. The Gulf Coast and Rocky Mountain prices were $3.07 per gallon and $3.37 per gallon, respectively, both six cents lower than last week. On the West Coast the price fell a nickel to $3.61 per gallon, and on the East Coast the price was $3.32 per gallon, a decline of four cents.
The national average diesel fuel price fell two cents to $3.87 per gallon, 16 cents lower than last year at this time. Prices in the East Coast, Midwest, and Gulf Coast regions all fell two cents, to $3.89 per gallon, $3.84 per gallon, and $3.78 per gallon, respectively. The Rocky Mountain and West Coast prices both decreased one cent, to $3.87 per gallon and $4.04 per gallon, respectively.
Recent decline in Gulf Coast crude oil imports mainly affects lighter grades
Crude oil imports to the U.S. Gulf Coast (PADD 3) which averaged 3.7 million barrels per day (bbl/d) year-to-date through July, the latest month for which data are available, have dropped by more than a third since 2008. The decrease of more than 1.9 million bbl/d from the 2008 average of 5.6 million bbl/d has included almost all imports of light, sweet crude oil, a development that has significant implications for global crude oil price relationships. Nearly half of U.S. refining capacity is along the Gulf Coast, and imports into this region substantially determine overall U.S. crude oil import trends.
Much of the decline in imports can be attributed to the significant increase in U.S. crude production over the last five years. In 2008, U.S. crude oil production averaged 5.0 million bbl/d, the lowest level since 1946. Crude production has increased dramatically since then, due largely to the widespread application of advanced techniques combining horizontal drilling and hydraulic fracturing. Over the first 7 months of 2013, U.S. crude oil production averaged 7.3 million bbl/d. Because much of the new crude oil produced in the United States is light and sweet in quality, barrels of similar grades were the first to be backed out of Gulf Coast imports. In three major port areas in the region — Houston, Texas; Port Arthur, Texas; and New Orleans, Louisiana — combined light sweet imports dropped from a 2008-10 average of nearly 650,000 bbl/d to just over 60,000 bbl/d in 2013 through July (Figure 1).