Released January 09, 2025 | SUGAR LAND
en
Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--Drivers got a bit of a break in 2024 as retail gasoline prices averaged 21 cents per gallon less than in 2023, says a new report from the U.S. Energy Information Administration (EIA). The 2024 price averaged $3.30 per gallon nationwide as opposed to 2023's $3.51 per gallon.
A combination of lower crude oil prices and narrower refinery margins were the main drivers, says the report.
Prices in 2023 were already lower than those in 2022, the latter year seeing the highest inflation-adjusted gasoline prices since 2014. Prices for crude and all refined products hit highs in 2022 as the U.S. and the world returned to the road in significant numbers as they recovered from the COVID-19 pandemic.
Seasonal Ups and Downs
Somewhat surprisingly, 2024 gasoline prices peaked at $3.67 per gallon in late April, before the travel season really got underway. That average was 21 cents lower than 2023's high of $3.88 per gallon, reached in September of that year.
The EIA points out that the reaching of a high point in April, before the driving season really starts, indicates that crude oil prices declined during the second half of the year. "Retail prices decreased to an annual low of $3.01/gal in early December and remained at a similar level through the rest of 2024." Gasoline prices fluctuated less in 2024 than in 2023, reflecting 2024's relatively stable crude prices.
Location, Location, Location--Where You Are Determines Gasoline Price
Of the five gasoline regions, it will likely be no surprise to energy followers that the highest average price in 2024 was on the West Coast, which includes California, at $4.18 per gallon, where fuel standards are strictest, and that the lowest average was in the oil producing regions of the Gulf Coast, at $2.89 per gallon.
World Markets Decline
Crude prices trended lower in the second half of 2024, largely due to concerns about demand drops in China, the world's largest crude oil importer. There, consumption of both diesel and gasoline declined, as consumers moved more toward electric vehicles and delivery trucks transitioned from diesel to liquified natural gas or compressed natural gas, all of which is designed to reduce greenhouse gas emissions.
In another report, dated January 6, 2025, the EIA pointed out that one benchmark, Brent crude oil, peaked in April at $91 per barrel and hit its low point, $69 per barrel, in September. Prices rose briefly after that before settling in at just over the lowest point but were always lower than most first-half levels. Prices had risen temporarily in the first half of the year due to concerns about Middle East conflicts, but the China demand issues ruled prices in the latter months.
Overall, Brent averaged $80 per barrel in 2024, $2 below the previous year. And the intraday trading range was the narrowest in recent memory, staying within a $24 range, between $68 and $93 per barrel (after rounding), which was the narrowest trading range since 2019. Adjusting the trading range for inflation, last year was the narrowest since 2003.
As prices are driven by supply and demand levels, the EIA reports that oil consumption expanded by less than 1 million barrels per day in 2024. That's significantly less than the average growth from 2010-2020, the decade before the pandemic, which averaged 1.5 million barrels per day.
On the supply side, the EIA's December 10, 2024, Short Term Energy Outlook (STEO) estimated that global liquid fuels production increased by 0.6 million barrels per day (BBL/d) in 2024, with the Organization of Petroleum Exporting Countries and its allies (OPEC+_) reducing output by 1.3 million BBL/d while non-OPEC+ nations, including Canada and the U.S., upped output by 1.9 million BBL/d.
Those OPEC+ cuts combined with some continued growth in demand have pushed global inventory levels down, said the STEO. Inventory withdrawals reached about 0.4 million BBL/d on average in 2024, and the EIA expects withdrawals to rise to 0.7 BBL/d in the first quarter of 2025.
For next year, "We expect global production of liquid fuels will increase in 2025 by more than 1.6 million BBL/d, with almost 90% of the growth coming from countries outside of OPEC+," said the EIA.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
A combination of lower crude oil prices and narrower refinery margins were the main drivers, says the report.
Prices in 2023 were already lower than those in 2022, the latter year seeing the highest inflation-adjusted gasoline prices since 2014. Prices for crude and all refined products hit highs in 2022 as the U.S. and the world returned to the road in significant numbers as they recovered from the COVID-19 pandemic.
Seasonal Ups and Downs
Somewhat surprisingly, 2024 gasoline prices peaked at $3.67 per gallon in late April, before the travel season really got underway. That average was 21 cents lower than 2023's high of $3.88 per gallon, reached in September of that year.
The EIA points out that the reaching of a high point in April, before the driving season really starts, indicates that crude oil prices declined during the second half of the year. "Retail prices decreased to an annual low of $3.01/gal in early December and remained at a similar level through the rest of 2024." Gasoline prices fluctuated less in 2024 than in 2023, reflecting 2024's relatively stable crude prices.
Location, Location, Location--Where You Are Determines Gasoline Price
Of the five gasoline regions, it will likely be no surprise to energy followers that the highest average price in 2024 was on the West Coast, which includes California, at $4.18 per gallon, where fuel standards are strictest, and that the lowest average was in the oil producing regions of the Gulf Coast, at $2.89 per gallon.
World Markets Decline
Crude prices trended lower in the second half of 2024, largely due to concerns about demand drops in China, the world's largest crude oil importer. There, consumption of both diesel and gasoline declined, as consumers moved more toward electric vehicles and delivery trucks transitioned from diesel to liquified natural gas or compressed natural gas, all of which is designed to reduce greenhouse gas emissions.
In another report, dated January 6, 2025, the EIA pointed out that one benchmark, Brent crude oil, peaked in April at $91 per barrel and hit its low point, $69 per barrel, in September. Prices rose briefly after that before settling in at just over the lowest point but were always lower than most first-half levels. Prices had risen temporarily in the first half of the year due to concerns about Middle East conflicts, but the China demand issues ruled prices in the latter months.
Overall, Brent averaged $80 per barrel in 2024, $2 below the previous year. And the intraday trading range was the narrowest in recent memory, staying within a $24 range, between $68 and $93 per barrel (after rounding), which was the narrowest trading range since 2019. Adjusting the trading range for inflation, last year was the narrowest since 2003.
As prices are driven by supply and demand levels, the EIA reports that oil consumption expanded by less than 1 million barrels per day in 2024. That's significantly less than the average growth from 2010-2020, the decade before the pandemic, which averaged 1.5 million barrels per day.
On the supply side, the EIA's December 10, 2024, Short Term Energy Outlook (STEO) estimated that global liquid fuels production increased by 0.6 million barrels per day (BBL/d) in 2024, with the Organization of Petroleum Exporting Countries and its allies (OPEC+_) reducing output by 1.3 million BBL/d while non-OPEC+ nations, including Canada and the U.S., upped output by 1.9 million BBL/d.
Those OPEC+ cuts combined with some continued growth in demand have pushed global inventory levels down, said the STEO. Inventory withdrawals reached about 0.4 million BBL/d on average in 2024, and the EIA expects withdrawals to rise to 0.7 BBL/d in the first quarter of 2025.
For next year, "We expect global production of liquid fuels will increase in 2025 by more than 1.6 million BBL/d, with almost 90% of the growth coming from countries outside of OPEC+," said the EIA.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
