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Weekly Energy Update · Week 32
Fuel & Energy Report
B Mello Ag Services · Central Valley, CA
Published Monday, August 3, 2026 • Week in Review: July 27–August 2 • Forecast: August 3–9
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♦ CA DIESEL $6.91 (▲10¢ WK) ♦ CA REGULAR $5.65 (▲6¢ WK) ♦ US DIESEL $5.31 ♦ WTI $84.67 ♦ BRENT $90.12 ♦ ▲ BRENT +24% IN JULY ♦ OPEC+ ADDS 188K B/D FOR SEPT
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📈 This Week’s Call
Higher again. We look for another 5–15¢ on gasoline and 10–20¢ on diesel by Friday.
Last week we told you to top off early because crude was carrying a $90 handle. That was the right trade. The de-escalation headlines mid-week never turned into anything, Brent settled Friday at $90.12 and WTI at $84.67, capping a 24% July, the strongest month since March. AAA had California diesel at $6.91 and regular at $5.65 by Friday, and the rack has not finished passing July through. Cover your harvest diesel now rather than week to week. Our read and the data behind it are below.
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Section 1
Last Week at the Pump
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EIA’s last published retail survey covers the week ending Monday, July 27: California diesel jumped 20 cents to $6.670 and regular gasoline rose 14 cents to $5.489. The fresher read is AAA’s daily survey, and it says the climb kept going, by Friday, July 31, California diesel had pushed to $6.910 and regular to $5.651. EIA’s next print lands Monday afternoon and should confirm it.
| CA Diesel |
| $6.910 |
| statewide avg · AAA 7/31 |
| ↑ 10¢ wk · up $1.73 vs. a year ago. |
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| CA Regular |
| $5.651 |
| statewide avg · AAA 7/31 |
| ↑ 6¢ wk · up $1.17 vs. a year ago. |
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| WTI Crude |
| $84.67 |
| settle · Fri 7/31 |
| ↑ 1.3% on the day, and up 21% across July. |
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| Brent Crude |
| $90.12 |
| settle · Fri 7/31 |
| ↑ 1.2%, up 24% in July, the best month since March. |
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Central Valley & Reference Markets, Regular Unleaded
| Market |
Regular |
Note |
| Stockton |
$5.47 |
Cheapest major Valley market; Port of Stockton supply helps. AAA, July 31. |
| Modesto |
$5.47 |
Tied with Stockton and running about 18¢ under the statewide average. AAA, July 31. |
| Fresno |
$5.56 |
Valley hub; watch this one as harvest trucking ramps. AAA, July 31. |
| Sacramento |
$5.59 |
North Valley reference point. AAA, July 31. |
| San Francisco |
$5.83 |
Most expensive metro in the state, the Bay premium is running 27¢ over Fresno. AAA, July 31. |
| California avg. |
$5.651 |
AAA, July 31. Up about 6¢ on the week and $1.17 on the year. EIA’s week-ending 7/27 print was $5.489. |
| U.S. avg. |
$4.09 |
Held steady on the week and sits nearly a dollar above a year ago. California is the most expensive state in the country. |
Diesel detail: AAA put California on-highway diesel at $6.910 on July 31, up about 10 cents on the week, 35 cents on the month and $1.73 from a year ago. EIA’s official weekly print for the week ending July 27 was $6.670 against a national average of $5.313, a $1.36 California premium; the Gulf Coast was cheapest at $5.087. Off-road dyed diesel is exempt from California’s 48.2¢ state excise tax, raised from 46.6¢ on July 1, and the 24.4¢ federal excise, roughly a 73¢ per gallon spread before sales tax. Check your rack and cardlock quotes against these numbers, not the sign on the highway.
For your surcharge tables: the DOE national on-highway diesel average of $5.313 for the week of July 27 is the figure that governs fuel surcharges effective July 29 through August 4.
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Section 2
The Week Ahead: Our Forecast
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For the week of August 3 through 9. Retail lags the rack by roughly one to two weeks, and a 21 to 24 percent move in crude across July has not finished clearing that pipe. Gasoline moves first; diesel follows and holds its gains longer. Nothing we can see this week turns the pump lower.
| Fuel |
Expected Range |
Direction |
| CA Regular Gasoline |
$5.65 – $5.80 |
▲ Higher, another 5 to 15¢ on. |
| CA On-Highway Diesel |
$6.90 – $7.15 |
▲ Higher, 10 to 20¢ on, with harvest hauling starting to bid. |
| Central Valley Retail |
5 to 20¢ under state avg. |
▲ Follows the statewide move with a short lag. |
| Crude (WTI) |
$80 – $90 |
▲ Biased higher, wide range, entirely headline-driven. |
▲ Pushing Prices Up |
July was crude’s strongest month since March. Brent finished up 24% and WTI up 21%, settling Friday at $90.12 and $84.67.
Hormuz is still choked. The strait has been largely blockaded since the war on Iran began February 28, and Houthi forces have declared a naval blockade on Saudi Arabia’s Red Sea alternative. Freight and insurance premiums are baked into every barrel.
Crude stocks are tight. U.S. inventories fell 7.2 million barrels to 404.5 million, about 7% below the five-year average for this time of year.
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▼ Capping the Upside |
OPEC+ added barrels Sunday. The core seven signed off on 188,000 b/d more from September, finishing the rollback of the 1.65 million b/d voluntary cut layer.
Tankers are still moving. Traffic has continued through Hormuz and the Red Sea. WTI traded as low as $82.09 intraday Friday on better flows before recovering, proof of how fast the premium comes out when the news turns.
Driving season is ending. Gasoline demand at 9.04 million barrels a day is near its summer peak, and road-trip volume winds down through August.
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Our read: July’s move was risk premium sitting on top of a real supply constraint, not a paper rally, which is why we are not calling a top with harvest three to four weeks out. We favor covering harvest diesel now, through early October, instead of buying week to week into a rising market. What would invalidate this call: a credible Hormuz reopening or a U.S.–Iran framework, which would take $8 to $10 out of Brent in days and reach your rack about two weeks later. Watch the strait, not the sign at the pump.
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Section 3
Your Other Energy Costs
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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 |
We are in the teeth of PG&E’s summer season, which runs June through September with the peak window at 5–8 p.m. daily, holidays included. The Public Advocates Office models the average PG&E bill up 16% by 2027 and 30% by 2030. Ag groups are contesting the General Rate Case. Budget for the climb, not the press release. |
Natural Gas
(Henry Hub) |
Low
$2.75/MMBtu |
Gas eased to $2.75 on July 31 from $2.80 mid-month, near its lowest since early May, with storage running 6.4% above the five-year average. The one energy input on this page that is not going against you, good news for gas-fired pumps, dryers and dehydrators. SoCal Citygate has more than doubled this month to roughly $4 on heat load, so the north-south split is unusually wide. |
| Propane |
Seasonal low
72¢/gal wholesale |
Mont Belvieu spot has been flat around 72 cents through July. EIA’s residential survey is on its usual April–September pause and resumes October 7. August and September are historically the annual trough. This is the window to book fall and winter propane for frost protection, heaters and dryers. |
| LCFS Credits |
Firm
~$66–72/ton |
Spot credits have traded as high as $66.50 a ton against a first-quarter average near $63, and December futures have printed as high as $72, the market is bid because deficits now exceed credits. Diesel generates more deficits per gallon than gasoline, so this is a structural, one-way add to your fuel cost that does not fall when crude falls. Add the state’s cap-and-invest allowance, which cleared at $28.81 in May in a fourth straight sold-out auction. |
EV / Fleet
Charging |
47¢/kWh
CA public avg |
Unchanged on the week against a 42-cent national average. California is now the fourth most expensive state for public charging. On-site charging on an ag time-of-use schedule remains far cheaper than public DC fast charging. |
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What pumping actually costs you. At roughly 35 cents a kilowatt-hour, lifting one acre-foot from 300 feet at 60% overall plant efficiency runs about 512 kWh, or $179 per acre-foot. On a mature almond block taking 3.5 acre-feet, that is about $627 an acre in pumping power alone. Let that same pump slip to 45% efficiency, a worn bowl assembly will do it quietly, and the number jumps to $239 per acre-foot, or $835 an acre. That is a $208-per-acre penalty for a test you can schedule this month, and on a 100-acre block it is the same money as roughly 3,000 gallons of harvest diesel.
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Section 4
News Behind the Numbers
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Global · Highest Impact
Crude Closed July at Its Strongest Since March
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Brent settled Friday at $90.12, up $1.09 on the day, and WTI at $84.67, up $1.08, capping a month in which Brent gained 24% and WTI 21%. The drivers have not changed: the war with Iran that began February 28 has kept the Strait of Hormuz largely blockaded, Houthi militants declared a naval blockade on Saudi Arabia’s Red Sea export route, and U.S. crude inventories fell another 7.2 million barrels to 404.5 million, about 7% under the five-year average. Friday also showed the other side of the trade: WTI dipped to $82.09 intraday on signs of better Hormuz flows before buyers took it back. That is a $2.50 swing on a rumor, which is why we are telling you to cover harvest volume rather than trade the tape.
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OPEC+ · New This Weekend
OPEC+ Adds 188,000 Barrels for September, Then Stops
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Meeting virtually on Sunday, August 2, the seven core OPEC+ producers, Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan and Oman, agreed to raise September quotas by roughly 188,000 barrels a day, completing the unwind of the 1.65 million b/d voluntary cut layer first agreed in 2023. Delegates signaled the group will then pause further increases for the rest of the year, leaving about 2 million b/d of older cuts in place while it renegotiates 2027 baselines. Read it plainly: 188,000 barrels is a rounding error against what the Hormuz disruption has taken out of the market. Do not build your fall fuel budget on OPEC+ bailing you out.
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California · Structural
Why Our Floor Is Higher Than Everyone Else’s
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Phillips 66 ended crude processing at its 138,700 b/d Los Angeles refinery, and Valero has moved to close its 145,000 b/d Benicia plant. Together those two accounted for roughly 17% of California’s gasoline supply, and the state has lost close to 20% of its in-state refining capacity. EIA has warned the shortfall hits the West Coast harder than anywhere else, because we cannot easily pull product from the rest of the country, the replacement barrels come by ship from the Gulf and Asia. Layer on the July 1 excise increase to 63.4¢ on gasoline and 48.2¢ on diesel, plus LCFS and cap-and-invest costs, and you get the mechanical reason California diesel sits $1.36 above the national average. None of that floor moves when crude does. Expect wider swings here and more sensitivity to any single refinery upset.
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Central Valley · Harvest Ahead
A Smaller Almond Crop Meets Expensive Diesel
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USDA puts the 2026 California almond crop at 2.70 billion pounds on a yield of 1,940 pounds per acre, with bearing acreage down to about 1,385,870 acres, the first recorded decrease since 1995. San Joaquin shaking starts late August and runs into October up north, and with surface water allocations near 30% state and 20% federal, most of that irrigation load is coming off groundwater at full pumping cost. Fewer pounds over the same fixed fuel bill means your energy cost per pound climbs regardless of what the pump does. Run the numbers: at $6.91 diesel versus $5.18 a year ago, every 10,000 gallons you burn this harvest costs about $17,300 more than last season, and a 400-mile round-trip haul at 6 mpg runs $461 today against $345 last August, $116 more per load, every load.
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Section 5
What To Do This Week
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✓ Action Items
| 1. Cover harvest diesel now, not in September. Book through early October while you still have time to negotiate. July’s crude move has not finished reaching your rack, and shaking starts in three to four weeks. |
| 2. Book fall propane now. Mont Belvieu is flat at 72 cents and August–September is the seasonal trough. This is the best pricing window of the year for frost protection and dryer supply. |
| 3. Pull a pump efficiency test before harvest. The math above is worth about $208 an acre on a 300-foot lift. Test slots fill fast once shaking starts, book it in the next two weeks. |
| 4. Keep irrigation out of the 5–8 p.m. window. We are in PG&E’s June–September summer season, and that peak block applies every day including holidays. Moving load to night hours is still the cheapest energy savings available to you. |
| 5. Audit your fuel surcharges against $5.313. That is the DOE national figure governing surcharges July 29 through August 4. In a fast-moving market it is worth confirming your haulers are billing off the right week, not a stale one. |
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👀 What We’re Watching Next Week
Monday, Aug. 3: EIA weekly retail price survey, the first official print capturing the last week of July’s crude move. Wednesday, Aug. 5: EIA weekly petroleum status report; distillate inventories are the tell for where diesel goes next. Week of Aug. 10: EIA Short-Term Energy Outlook, the first one carrying September OPEC+ quotas. Ongoing: Hormuz transit volumes and Red Sea insurance rates, the cleanest real-time read on the risk premium. Local: Valley heat driving pump load, and the first harvest reports out of the southern San Joaquin.
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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
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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
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B Mello Ag Services · Central Valley, CA
Weekly Energy Update · Week 32 · Published Monday, August 3, 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: U.S. Energy Information Administration weekly retail gasoline and diesel price survey (week ending July 27, 2026) and weekly petroleum status report; AAA Fuel Price Report and AAA Mountain West Group release (July 31, 2026); Reuters and CNBC crude market coverage of the July 31 settlements and the August 2 OPEC+ meeting; Mont Belvieu propane spot and Henry Hub natural gas quotations (July 31, 2026); Natural Gas Intelligence SoCal Citygate reporting; Argus Media and ICE LCFS credit assessments; California Air Resources Board cap-and-invest auction summary results (May 2026); California Department of Tax and Fee Administration excise tax rates effective July 1, 2026; CPUC / California Public Advocates Office PG&E revenue analysis and PG&E agricultural tariff schedules; Oil & Gas Journal and EIA refinery closure reporting; and USDA NASS 2026 California Almond Forecast.
Cell: (559) 816-3889
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