Weekly Energy Update — July 27, 2026

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Weekly Energy Update · Week 31

Fuel & Energy Report

B Mello Ag Services · Central Valley, CA

Published Monday, July 27, 2026 • Week in Review: July 20–26 • Forecast: July 27–August 2

♦ CA DIESEL $6.81 (▲17¢ WK) ♦ CA REGULAR $5.60 (▲17¢ WK) ♦ FRESNO $5.48 ♦ MODESTO $5.40 ♦ STOCKTON $5.38 ♦ WTI ~$89 ♦ BRENT ~$100 ♦ HORMUZ DISRUPTED

📈 This Week’s Call

Higher. We look for another 5–15¢ on gasoline and 5–12¢ on diesel by Friday.

Crude carried a $90 handle into the weekend on renewed attacks in the Strait of Hormuz, and California is heading into harvest logistics season with roughly a fifth of its refining capacity now gone or going. If you burn diesel, top off your on-farm tanks early in the week. Our read and the data behind it are below.

⛽

Section 1

Last Week at the Pump

Week of July 20–26. California pump prices climbed for a third straight week. The statewide regular average rose 17 cents to $5.60 and diesel rose about 17 cents to $6.81 — the fastest weekly move since the spring run-up. California remains the most expensive gasoline market in the country, roughly $1.50 above the national average.

CA Diesel

$6.808

statewide avg · retail

↑ 16.7¢ wk · up $1.61 vs. a year ago.

CA Regular

$5.595

statewide avg · retail

↑ 16.5¢ wk · up $1.11 vs. a year ago.

WTI Crude

~$89/bbl

front month · Fri 7/24

Volatile. Settled $86.83 Wed, opened $92.39 Fri.

Brent Crude

~$100/bbl

front month · Fri 7/24

Triple digits. Gulf war-risk premium is back in the price.

Central Valley & Nearby Markets — Regular Unleaded, Friday July 24

Market

Regular

Note

Stockton

$5.38

Cheapest major Valley market; Port of Stockton supply helps.

Modesto

$5.40

About 20¢ under the statewide average.

Fresno

$5.48

Valley hub; watch this one as harvest trucking ramps.

Sacramento

$5.51

North Valley reference point.

California avg.

$5.595

Highest in the nation; Hawaii is second at $5.42.

U.S. avg.

$4.09

Up 15¢ on the week — this is a national move, not just ours.

Diesel detail: California regular retail diesel finished the week at $6.808, versus $6.641 a week earlier and $5.196 a year ago. That is a 31% year-over-year increase. Off-road (dyed) and cardlock bulk deliveries typically run meaningfully under posted retail because they carry no state excise tax — check your rack quote against these numbers rather than the sign on the highway.

🔮

Section 2

The Week Ahead: Our Forecast

For the week of July 27 through August 2. Retail lags the rack by roughly one to two weeks, so last week’s crude move is still working its way to the pump. Nothing on the supply side has resolved.

Fuel

Expected Range

Direction

CA Regular Gasoline

$5.65 – $5.75

▲ Higher — another 5–15¢.

CA On-Highway Diesel

$6.86 – $6.93

▲ Higher — another 5–12¢.

Central Valley Retail

15–22¢ under state avg.

▲ Follows the statewide move with a short lag.

Crude (WTI)

$85 – $95

⇆ Headline-driven — wide swings on Hormuz news.

▲ Pushing Prices Up

Hormuz attacks are escalating. At least nine vessels have been hit since July 6, and a tanker struck a mine in the strait on Sunday. Roughly 20 million barrels a day normally transit that waterway.

Crude inventories are thin. U.S. stocks sit at 411.7 million barrels — about 6% below the five-year average for late July.

Harvest demand is building. Valley trucking, hulling and drying loads step up sharply from here through October.

▼ Capping the Move

Gasoline supply is adequate. Domestic gasoline stocks rose to 211.3 million barrels and production averaged 9.7 million b/d.

EIA still sees relief ahead. The July Short-Term Energy Outlook cut the 3Q26 Brent forecast to $74/bbl and puts full-year 2027 Brent near $65.

Any de-escalation cuts fast. Most of the current crude price is war-risk premium, and premiums unwind quickly.

Our read: The near-term path is higher, but this is a risk-premium rally rather than a fundamental shortage of product. That argues for covering near-term needs now — fill on-farm tanks, top off harvest equipment — while being cautious about locking long-dated fixed-price contracts at these levels. If the Gulf calms, forward diesel could come off quickly.

⚡

Section 3

Your Other Energy Costs

Diesel gets the headlines, but for most Valley operations the pump motor is the bigger line item. Here is where the rest of your energy stack sits this week.

Input

Where It Is

What It Means for You

Electricity
(pump power)

~35¢/kWh
CA average

Ag time-of-use rates came down 3–4% on January 1, but PG&E’s pending General Rate Case asks for roughly 8% more revenue in 2027 and about 6% per year in 2028–29. Cal Advocates models the average bill up ~16% by 2027. Enjoy the dip; plan for the climb.

Natural Gas
(PG&E Citygate)

Low
~$1.60–2.00/MMBtu

Northern California gas hit all-time lows near $1.15 in April and remains cheap versus Henry Hub (~$3.09). Good news for gas-fired pumps, dryers and dehydrators. SoCal Citygate has doubled to roughly $4 on heat demand — the split is unusually wide.

Propane

Seasonal low
~$2.20–2.35/gal

Inventories are running above the five-year average and typically peak in October. August–September is historically the annual trough. This is the window to book fall and winter propane for frost protection, heaters and dryers.

LCFS Credits

Rising
~$66–72/ton

Carbon-intensity targets tightened again in January and step down further each year. Because diesel generates more deficits per gallon than gasoline, this is a structural, one-way add to your diesel cost — it does not fall when crude falls.

EV / Fleet
Charging

46¢/kWh
CA public avg

Flat on the week. California is the fifth most expensive state for public charging. On-site charging on an ag TOU schedule remains far cheaper than public DC fast charging.

📰

Section 4

News Behind the Numbers

Global · Highest Impact

Hormuz Attacks Put a War Premium Back in Crude

At least nine vessels have been attacked in and around the Strait of Hormuz since July 6 as Iran attempts to force traffic through its territorial waters, and a tanker detonated a mine in the strait on Sunday, July 26. Maritime risk analysts are calling it a worst-case scenario for shippers. Roughly 20 million barrels of crude a day and about a fifth of global LNG normally move through that chokepoint. This is the single biggest driver of what you paid at the pump last week — and the main reason we expect another move up this week.

California · Structural

Refinery Closures Are Reshaping Our Supply

Phillips 66 produced its last barrel of conventional fuel in Los Angeles in October 2025, and Valero began shuttering its 170,000 b/d Benicia refinery this spring. Together those two remove close to 20% of California’s in-state refining capacity. EIA has warned the shortfall will have an outsized regional effect because the West Coast cannot easily draw product from the rest of the country — we import from Asia instead. UC Davis economists modeled a cumulative $1.21/gal impact by August 2026; the actual move so far has been smaller, but the structural tightness is real and it does not go away when crude retreats. Expect wider price swings and more sensitivity to any single refinery upset.

Central Valley · Water = Energy

SGMA Pumping Limits Are Now a Fuel Story

Surface deliveries remain short — many Central Valley Project contractors are working from allocations in the mid-teens — which pushes demand onto groundwater just as SGMA caps bite. On the east side of the Turlock Subbasin, growers are held to about 1.6 acre-feet per acre with steep penalties above that, against the 3–4 acre-feet a mature almond block typically wants. Districts have begun shutting down deep ag wells, and orchard removals are underway in eastern Merced County. Every foot of lift you have to buy is electricity or diesel, so pumping economics and energy budgets are now the same conversation.

Policy · Watch Item

EIA Still Forecasts Cheaper Crude — Later

The July Short-Term Energy Outlook cut EIA’s third-quarter Brent forecast by $27 to about $74/bbl, with full-year 2026 near $82 and 2027 near $65. Reality has run well above that so far. The takeaway is not that the forecast is wrong — it is that the entire gap between $74 and today’s $100 Brent is geopolitical risk premium, which can unwind as fast as it appeared. That asymmetry is exactly why we favor covering short-term needs over locking multi-year fixed pricing right now.

✅

Section 5

What To Do This Week

✓ Action Items

1. Fill on-farm diesel tanks Monday or Tuesday. Rack pricing this week should be below where it lands by Friday.

2. Book fall propane now. August–September is the seasonal trough and inventories are healthy — this is the best pricing window of the year.

3. Shift pumping off-peak. On AG-4/AG-5 time-of-use schedules, moving irrigation to night hours is still the cheapest energy savings available to you.

4. Pull a pump efficiency test before harvest. A worn bowl assembly can quietly cost 20–30% on every acre-foot you lift, and that penalty compounds at today’s rates.

5. Hold off on long-dated fixed diesel. Cover 30–60 days; wait on 2027 contracts until the Gulf risk premium clears.

👀 What We’re Watching Next Week

Wednesday: EIA weekly petroleum status report — crude and gasoline builds or draws. Ongoing: Hormuz shipping traffic and insurance rates; any move toward de-escalation would take 10–20¢ off retail within two weeks. Also: West Coast refinery run rates and any unplanned outage — with Benicia down, our margin for error is thin. Local: heat forecasts driving pump load and SoCal gas demand.

Let’s Build Your Energy Plan

Fuel, pumping power and input costs all run through the same budget. We can walk your operation, look at your rate schedule and pump efficiency, and time your buys around what the market is actually doing. Reach out any time.

Fuel Buying Strategy Pumping Cost Review Custom Blends Soil & Water Analysis

(559) 816-3889

bryan@bmelloag.com

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We watch the world markets so you can stay focused on the ground under your boots. Every Monday morning, you’ll know what fuel and power did last week — and what we think they’ll do next.

Proudly American · Rooted in the American Dream

Bryan Mello

B Mello Ag Services — Central Valley, California

B Mello Ag Services · Central Valley, CA

Weekly Energy Update · Week 31 · Published Monday, July 27, 2026

(559) 816-3889 · bryan@bmelloag.com

This Weekly Energy Update is provided for informational and educational purposes only. Fuel, power and commodity prices are sourced from publicly available market and industry reports as of the publication date and are subject to rapid change; figures are approximate and forward-looking statements reflect our current market view, not a guarantee. Retail averages will differ from your rack, cardlock or contract pricing. This publication does not constitute financial, legal, or agronomic advice. Always consult a licensed commodity broker before making marketing or hedging decisions and a licensed PCA/CCA before making agronomic decisions. B Mello Ag Services assumes no liability for decisions made based on information in this publication.

Data sources: AAA Fuel Price Report (July 24, 2026), U.S. Energy Information Administration weekly retail prices, petroleum status report and July 2026 Short-Term Energy Outlook, USDA weekly diesel report, CPUC / California Public Advocates Office Q1 2026 Electric Rates Report, PG&E tariff schedules, Natural Gas Intelligence PG&E and SoCal Citygate indices, Argus Media LCFS credit assessments, U.S. Bureau of Reclamation Central Valley Project allocations, and California Farm Bureau Ag Alert reporting.

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