As I wrote two months back would happen, the price of gasoline is catching up with diesel after a couple years of separation. A year ago, diesel would cost you 60 cents more than gasoline. But looking at the trends in pump prices over the last few days, parity should be reached by week’s end. In fact, the EIA weekly petroleum report believes gasoline’s price has already overtaken diesel ($2.24 vs. $2.22). AAA says diesel was still a penny and a half pricier this morning. Once higher, gasoline will probably stay more expensive than diesel until winter heating oil demand (a close cousin of diesel) picks up.
Other Developments in the Weekly Oil Report
Crude oil inventories finally moderated this week but remain extremly high, falling more than 1% on lower imports. And gasoline storage fell almost 2% back to average levels for this time of year. Gasoline imports and production were both lower, though gasoline demand more than 4% below year-ago levels moderated the decline. Distillate (diesel) and propane inventories continued to climb way above average for early May as their demand was down 12.1% and 1.3%, respectively. US crude output remained steady ~5.3 Mbd, as new Gulf of Mexico oil made up for other fields’ decline.
Bottom line: Efficient diesel vehicles are competitive again with their gasoline counterparts. And a continued focus on efficiency will allow us to enjoy sub-$3 pump prices for a while with today’s high inventories.
Onwards in the Sustainable Energy Transition-