US retail fuel prices follow crude higher

US retail gasoline prices followed benchmark crude prices higher last week to a new, more than three-year high.

National average retail gasoline prices increased by 4.8¢/USG to $2.846/USG, its highest average since November 2014, according to the Energy Information Administration. A 6.7¢/USG increase in the midcontinent, to $2.724/USG, led the rise, reaching its highest average since August 2015. Rocky Mountain average prices moved the least, higher by 3.1¢/USG to $2.803/USG.

On-highway diesel prices increased by 2.4¢/USG to $3.157/USG. Midcontinent prices again led the increase, by 3.6¢/USG to $3.083/USG, with US Gulf coast prices moving the least, higher by 1¢/USG to $2.946/USG.

Ice Brent and Nymex light, sweet crude futures have also reached their highest levels since November 2014. But yesterday's Ice Brent settlement of $75.17/bl remained short of levels that refiners expect will begin to reduce demand.

High prices had not yet significantly reduced street demand, Valero vice president of supply Gary Simmons said this month. Demand destruction begins between $80/bl and $100/bl, he said. US consumers have preferred light trucks and other heavier vehicles that demand more fuel, Valero chief executive Joe Gorder added.

"From a practical standpoint, even with the higher price, it is going to be difficult to moderate their consumption that much, based on the vehicles that they are buying today," Gorder said in an earnings call.