The national average price per gallon for diesel and gasoline remained elevated this week, though there are significant fluctuations on a regional basis in week-to-week price comparisons, according to data tracked by the Energy Information Administration (EIA)
The national average price for diesel fuel slipped 3/10ths of a penny to $3.025 per gallon this week compared to last week, the agency said, though that price is 45.6 cents per gallon higher when compared to the same time period in 2017.
Diesel fuel prices fluctuated on a regional basis, with per gallon declines of 2.9 cents and 1.3 cents, respectively, for the Rocky Mountains and West Coast (with California removed from the pricing mix) offset by per-gallon price hikes of 2.2 cents, 1.6 cents and 1.3 cents, respectively, for New England, the Lower Atlantic, and Central Atlantic areas, EIA said.
The national average price for gasoline inched up a penny to $2.567 per gallon this week – 24.1 cents per gallon higher compared to the same week in 2017 – with prices declining only in the Midwest region, which registered a drop of 3.8 cents per gallon. That was offset by a 5.4 cent per-gallon hike in the Lower Atlantic area, which helped push up East Coast gasoline prices overall by 3.9 cents per gallon this week.
Longer term, however, the oil-producing power of the U.S. may help change the trajectory of diesel and gasoline fuel prices.
Last week, Fatih Birol, executive director of the International Energy Agency (IEA), testified before the U.S. Senate Committee on Energy and Natural Resources and highlighted the “resilience and further growth potential” of American shale gas and tight oil resources due to hydraulic fracturing techniques.
According to the IEA’s recent World Energy Outlook 2017 report, Birol said the “resilience” of shale oil and gas production in the U.S., coupled with the “remarkable ability” of producers to unlock new resources cost-effectively, has pushed projections for U.S. oil and gas output in 2040 to a level 50% higher than any other country has ever managed.
“This is an impressive feat, which cannot be overstated,” he stressed in his testimony. “The U.S. is poised to become the undisputed oil and gas producer in the world over the next several decades.”
Near term, EIA expects total U.S. crude oil production to average 10.3 million barrels per day (b/d) in 2018, up 10% from 2017. If achieved, this would be the highest annual average U.S. oil production on record, the agency said – surpassing the previous record of 9.6 million b/d set in 1970. In 2019, EIA expects crude oil production to continue to increase, reaching an average of 10.8 million b/d.
Increased production from the Permian region in Texas and New Mexico accounts for most of the projected increase in the U.S. total. EIA also expects a significant contribution to crude oil production growth from the Federal Gulf of Mexico, as seven new oil-producing projects are slated to come online by the end of 2019.