Average retail prices for diesel and gasoline continued to increase this week in the U.S. according to data tracked by the Energy Information Administration (EIA), with the agency noting that global oil supply is going to be affected by the massive wildfire sweeping through Alberta, Canada, shutting down most of the area’s oil sands production activity.
The national retail average for diesel increased 2.8 cents this week to $2.297 per gallon, according to EIA. That's the sixth consecutive weekly gain and the highest price since mid-December, though it's still 60.7 cents per gallon cheaper compared to the same week in 2015.
Diesel prices increased in every region of the country this week, the agency said, with the biggest hikes along the West Coast (not including California’s prices) where diesel jumped 5.7 cents to $2.425 per gallon and in the Rocky Mountains with a 4.7 cent hike to $2.325 per gallon.
Meanwhile, the national retail average for gasoline increased 2.2 cents this week to $2.242 per gallon, EIA noted, though that’s 50.2 cents cheaper per gallon compared to the same week last year.
The EIA also noted in its most recent Short-Term Energy Outlook (STEO) that although it’s predicting the global liquid fuels supply will grow by 0.5 million barrels per day (b/d) in 2016 and by 0.8 million b/d in 2017, the massive wildfire affecting the oil sands production region of Alberta, Canada, may have an impact down the road.
The EIA noted that global crude oil production “outages” averaged 2.8 million b/d in April, up slightly from March – a number likely be higher going forward based on the reduction of Alberta's oil sands production caused by wildfires.
EIA estimates that oil sands output fell in recent days by as much as 1.0 million b/d, as wildfires reached Fort McMurray, Alberta, the center of Canadian oil sands industry. Consequently, EIA expects that second-quarter 2016 Canadian oil sands production will be reduced significantly. Depending on the extent of damage, production outages could carry forward into summer, the agency added.
EIA stressed, however, that the current reduction in Canadian crude oil output is due not to direct damage from the fires in Alberta, but rather the evacuation of oil workers from Fort McMurray. Oil sands operations may be seriously reduced by the unavailability of staff in the coming days and weeks.