How Do Crude Oil, Gasoline, and Diesel Prices Mirror Each Other?



Gasoline and diesel prices in 2016 

The EIA (U.S. Energy Information Administration) estimates that US gasoline prices could average around $1.98 per gallon in 2016. It’s the lowest annual average for gasoline prices since 2004. The catastrophic fall in crude oil prices led to the fall in gasoline prices. Lower crude oil prices and the higher crack spread boosted refineries like HollyFrontier (HFC), Western Refining (WNR), Phillips 66 (PSX), and Tesoro (TSO) to operate at their maximum capacity. This led to glut in the gasoline market. Read more about gasoline stocks at Larger Rise in Gasoline Inventories Impacted Crude Oil Prices. Diesel is the refined form of crude oil. It also fell in 2016 due to record low oil prices. Read Rising Distillate Inventory Pressures Oil Prices for an update on distillates. The EIA added that diesel fuel prices are estimated to average around $2.22 per gallon in 2016 and $2.58 per gallon in 2017, respectively.

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Gasoline and diesel prices last week and last year

US retail gasoline prices fell by $0.06 to $1.76 per gallon as of February 8, 2016—compared to the previous week. The current gasoline prices fell by $0.43 during the same period in 2015. US diesel prices fell by $0.02 to $2 per gallon as of February 8, 2016—compared to the previous week. The current diesel prices are less $0.83 than the same period last year. Read the previous part of the series to know more about crude oil prices’ biggest rally in seven years.


Historically low gasoline and diesel prices will impact oil refiners’ margins like Phillips 66 (PSX), Marathon Petroleum (MPC), and Valero Energy (VLO). The VanEck Vectors Oil Refiners ETF (CRAK) tracks the performance of the largest and most liquid companies in the global refining segment. In contrast, the United States Oil Fund (USO) track the performance of crude oil futures contracts.

Lower oil prices also impact oil producers like Hess (HES), ConocoPhillips (COP), and Energy XXI (EXXI). The above chart clearly shows how lower crude oil prices led to a fall in gasoline and diesel prices. Read the next part of the series to learn more. Read more about rig counts in Part 4 and Part 5 in this series. We’ll also highlight how oil prices impact investments in the oil and gas industry. We’ll illustrate how OPEC and non-OPEC supply disruptions impact oil prices. Meanwhile, scaling up production from Iran will continue to put pressure on oil prices.

The roller coaster ride in crude oil prices impacts ETFs and ETNs such as the United States Oil Fund (USO), the VelocityShares 3x Long Crude Oil ETN (UWTI), the Direxion Daily Energy Bull 3x (ERX), and the ProShares UltraShort Bloomberg Crude Oil ETF (SCO).


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