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Weekly Energy Update · Week 33
Fuel & Energy Report
B Mello Ag Services · Central Valley, CA
Published Monday, August 10, 2026 • Week in Review: August 3–9 • Forecast: August 10–16
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♦ CA DIESEL $6.88 (▼3¢ WK) ♦ CA REGULAR $5.61 (▼4¢ WK) ♦ US DIESEL $5.348 ♦ WTI $78 ♦ BRENT $83 ♦ ▼ BOTH CRUDES −7% ON THE WEEK ♦ HORMUZ DEAL STILL UNSIGNED
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📈 This Week’s Call
Modestly lower. We look for 5–12¢ off gasoline and 5–12¢ off diesel by Friday, and we would finish covering harvest into it.
Two weeks running we said the only thing that would break this market was a credible Hormuz reopening. Last week it showed up, and it worked exactly as advertised. Both benchmarks lost more than 7%, WTI bottoming near $75 on Wednesday before finishing Friday around $78. California pump prices turned with it: AAA has diesel at $6.877 and regular at $5.609, both down for the first week since June. Here is the part that matters: the deal is not signed. Iran’s parliament has not cleared it. We would use this break to finish booking harvest volume, not to bet on a bigger one.
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Section 1
Last Week at the Pump
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EIA’s official survey for the week ending Monday, August 3 still showed the tail of July’s rally: California diesel up 4.6 cents to $6.716 and regular up half a cent to $5.495. Then crude cracked. AAA’s daily numbers caught what EIA’s Monday snapshot could not, by Friday, August 7, California diesel had eased to $6.877 and regular to $5.609. That is the first weekly decline in either since late June.
| CA Diesel |
| $6.877 |
| statewide avg · AAA 8/7 |
| ↓ 3¢ wk · still up $1.71 vs. a year ago. |
| CA Regular |
| $5.609 |
| statewide avg · AAA 8/7 |
| ↓ 4¢ wk · still up $1.11 vs. a year ago. |
| WTI Crude |
| ~$78 |
| Fri 8/7 · opened $78.31 |
| ↓ 7%+ wk · Wednesday settle was $75.22. |
| Brent Crude |
| ~$83 |
| Fri 8/7 · opened $83.49 |
| ↓ 7%+ wk · off $90.12 the Friday before. |
Central Valley & Reference Markets, Regular Unleaded
| Market |
Regular |
Note |
| Modesto |
$5.42 |
Cheapest major market in the state and 19¢ under the California average. AAA, August 7. |
| Stockton |
$5.44 |
Port of Stockton supply keeps this one competitive. AAA, August 7. |
| Fresno |
$5.54 |
Valley hub. Slipped 2¢ on the week, watch it as harvest trucking bids up. AAA, August 7. |
| Sacramento |
$5.55 |
North Valley reference point. AAA, August 7. |
| San Francisco |
$5.76 |
Still the priciest metro, a 34¢ premium over Modesto. AAA, August 7. |
| California avg. |
$5.609 |
AAA, August 7, down about 4¢ on the week, up $1.11 on the year. EIA’s week-ending 8/3 print was $5.495. |
| U.S. avg. |
$4.06 |
Down 3¢. About half the states are now under $4. California remains the most expensive market in the country. |
Diesel detail: AAA put California on-highway diesel at $6.877 on August 7, down about 3 cents on the week, but still up 40 cents on the month and $1.71 from a year ago. EIA’s official print for the week ending August 3 was $6.716 against a national average of $5.348, a $1.37 California premium. West Coast less California came in at $5.623 and the Gulf Coast at $5.141, so we are paying roughly $1.09 over our own neighbors and $1.58 over the Gulf. Off-road dyed diesel is exempt from California’s 48.2¢ state excise tax and the 24.4¢ federal excise, roughly a 73¢ per gallon spread before sales tax. Price your rack and cardlock against these numbers, not the sign on the highway.
For your surcharge tables: the DOE national on-highway diesel average of $5.348 for the week of August 3 is the figure that governs fuel surcharges effective August 5 through August 11.
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Section 2
The Week Ahead: Our Forecast
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For the week of August 10 through 16. Crude gave back roughly $6.50 a barrel, about 15 cents a gallon of raw input cost, but half of that came back by Friday. Retail falls slower than it rises, and California’s tax, LCFS and refining floor does not move at all. Expect a drift lower, not a collapse.
| Fuel |
Expected Range |
Direction |
| CA Regular Gasoline |
$5.49 – $5.61 |
▼ Lower, 5 to 12¢ off, with summer driving demand already easing. |
| CA On-Highway Diesel |
$6.76 – $6.90 |
▼ Lower, 5 to 12¢ off, but harvest hauling starts bidding against the decline. |
| Central Valley Retail |
5 to 20¢ under state avg. |
▼ Follows the statewide move, and usually leads it lower. |
| Crude (WTI) |
$73 – $82 |
◄ Two-way, entirely on whether Tehran signs. Violent either way. |
▼ Pushing Prices Down |
A Hormuz shipping deal is on the table. Iran and Oman are negotiating an arrangement to restore transit. Even an unsigned draft took more than 7% out of both benchmarks in five sessions.
Crude stocks built. U.S. inventories rose 2.5 million barrels to 407 million. Still about 6% under the five-year average, but the direction flipped.
Saudi Aramco cut its Asian selling price. Producers do not discount into a tight market. That is a supply signal worth more than most headlines.
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▲ Holding Prices Up |
The deal is not signed. The draft has not cleared Iran’s parliament, it would bar U.S. and Israeli vessels outright, and Tehran wants the U.S. maritime blockade lifted first. Prices climbed back into Friday on exactly that doubt.
The Red Sea is still hot. Houthi forces claimed fresh strikes on Saudi positions and renewed threats against shipping last week.
California’s floor does not move. Excise, LCFS, cap-and-invest and 20% less in-state refining are all still there when crude falls.
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Our read: We said a credible Hormuz reopening would take $8 to $10 out of Brent in days. It took about $6.50 out on the rumor of one. That tells you how much of this price is paper risk premium and how little is physical shortage, but it also tells you the whole move reverses on one failed vote. We would finish covering harvest diesel into this dip and be done with it, you are being handed a better entry than last Monday, three weeks before shaking starts, and you do not have to be right about Tehran to make that work. What would invalidate this call: the draft dying in Iran’s parliament or another tanker incident, either of which puts the premium straight back on. Take the discount you were asking for. Do not wait for a bigger one.
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Section 3
Your Other Energy Costs
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Diesel gets the headlines, but in August the pump motor is the bigger line item on most Valley operations. 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 hottest stretch of PG&E’s summer season, which runs June through September with the peak window at 5–8 p.m. daily, holidays included. PG&E’s 2027 General Rate Case is pending at the CPUC with a decision expected in 2027, and ag groups are actively contesting it. Nothing changes your bill this week, but budget for the climb, not the press release. |
Natural Gas
(Henry Hub) |
Low
$2.66/MMBtu |
Gas eased again to $2.66 on August 7 from $2.75 the week before. Operators injected 33 Bcf into storage in the week ending July 31, beating the 23 Bcf five-year-average build, leaving inventories at 3,117 Bcf, 176 Bcf above the five-year average. This remains the one energy input on the page that is not going against you. Good news for gas-fired pumps, dryers and dehydrators. |
| Propane |
Seasonal low
72¢/gal wholesale |
Mont Belvieu spot is still sitting at 72 cents, flat for a second straight week. EIA’s residential survey stays on its April–September pause and resumes October 7. August and September are the historical annual trough. This is the window to book fall and winter propane for frost protection, heaters and dryers, and it is closing. |
LCFS &
Cap-and-Invest |
Firm
mid-$60s/ton |
LCFS credits have traded in the mid-$60s a ton against a first-quarter average near $63, bid because the 2024 amendments tightened credit supply and deficits now exceed credits. Diesel generates more deficits per gallon than gasoline, so this is a structural add to your fuel cost that does not fall when crude falls, which is exactly why the pump did not drop as far as crude did last week. The next cap-and-invest allowance auction is August 19; May settled at $28.81 in a fourth straight sold-out sale. |
EV / Fleet
Charging |
47¢/kWh
CA public avg |
Unchanged again on the week against a 42-cent national average, with California fourth most expensive in the country. On-site charging on an ag time-of-use schedule still beats public DC fast charging by a wide margin. |
What the 5–8 p.m. block actually costs you. A 100-horsepower pump draws roughly 83 kW at the meter once you account for motor losses. Run it straight through the three-hour peak window and that is 249 kWh a day landing in the most expensive block on your tariff. If your peak-to-off-peak energy spread is 15 cents a kilowatt-hour, pull your own schedule and check, because it varies, you are paying about $37 a day per pump for the privilege, or roughly $1,120 a month. Five pumps, and that is $5,600 a month in timing alone. Shifting that load to night hours is still the cheapest energy savings available to you, and it costs nothing but a controller setting.
And the lift itself: at 35 cents a kilowatt-hour, moving one acre-foot from 300 feet at 60% plant efficiency runs about 512 kWh, or $179 per acre-foot, roughly $627 an acre on a mature almond block taking 3.5 acre-feet. Let that pump slip to 45% efficiency and it becomes $239 per acre-foot, or $835 an acre. That $208-an-acre penalty is the case for a pump test before shaking starts.
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Section 4
News Behind the Numbers
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Global · Highest Impact
A Deal Nobody Has Signed Took 7% Out of Crude
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Both benchmarks fell more than 7% last week on an Iran–Oman arrangement to restore shipping through the Strait of Hormuz. WTI bottomed near $75 Wednesday, it settled at $75.22, then climbed back above $78 by Friday as the details got worse. The draft has not cleared Iran’s parliament. As written it would bar U.S. and Israeli vessels outright and fine violators a fifth of their cargo’s value, and Tehran is tying the whole thing to Washington lifting its maritime blockade first. Iran also said it struck targets inside the strait after explosions near Qeshm Island, while President Trump said he called off a planned strike. Five sessions, a $6 round trip, and not one barrel has actually moved. That is the market you are buying fuel in.
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California · Why You Kept Less of It
Crude Fell 7%. Your Pump Fell Less Than 1%.
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California regular came off about 4 cents and diesel about 3 cents while crude gave up more than seven percent. Part of that is timing, retail lags the rack by one to two weeks in both directions, so more of the decline is still in the pipe. But part of it is permanent. Phillips 66 shut its Los Angeles-area refinery in late 2025 and Valero stopped making gasoline at Benicia in April; together they were roughly 17% of California’s gasoline supply. Add the July 1 excise step to 63.4¢ on gasoline and 48.2¢ on diesel, LCFS credits bid into the mid-$60s a ton, and cap-and-invest allowances that cleared at $28.81. None of that floor falls when crude does, which is why California diesel still sits $1.37 over the national average and $1.09 over the rest of the West Coast.
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Fundamentals · Quietly Loosening
Inventories Built and Aramco Discounted, Both Point Lower
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U.S. crude inventories rose 2.5 million barrels to 407 million, about 6% under the five-year average but building instead of drawing for the first time in weeks. Gasoline demand slipped to 9.03 million barrels a day and total gasoline supply fell to 209.7 million barrels. Meanwhile Saudi Aramco cut its official selling price to Asian buyers, producers do not discount into a shortage. Against all of that, EIA’s own outlook had penciled Brent averaging about $74 a barrel for the third quarter, well under where we are trading. If the risk premium ever fully deflates, that $74 is roughly where this lands, call it another 30 to 40 cents a gallon at a California pump, and it would take a month to get there.
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Central Valley · Harvest Now
Shaking Starts in Weeks on a Smaller Crop
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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 more than 15,000 acres to about 1,385,870, the first recorded decrease since 1995. Southern San Joaquin shaking begins in the next few weeks and runs into October up north, on top of tomato and melon hauling that is already moving. Fewer pounds carrying the same fixed fuel bill means your energy cost per pound climbs no matter what the pump does. The arithmetic at today’s $6.877 against $5.165 a year ago: every 10,000 gallons you burn this harvest costs about $17,100 more than last season, and a 400-mile round-trip haul at 6 mpg runs $459 today against $344 last August, $115 more per load, every load.
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Section 5
What To Do This Week
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✓ Action Items
| 1. Finish covering harvest diesel on this break. Book through October now. You asked for a pullback and you got one, it is worth about $6.50 a barrel and it hangs on a vote in Tehran that has not happened. |
| 2. Book fall propane this week. Mont Belvieu is flat at 72 cents for a second week and August–September is the seasonal trough. Frost protection and dryer supply will never look cheaper than right now. |
| 3. Get the pump test on the calendar. Worth about $208 an acre on a 300-foot lift. Once shaking starts, the test slots are gone, this is the last clean window. |
| 4. Pull irrigation out of 5–8 p.m. That is roughly $1,120 a month per 100-HP pump on a 15-cent peak spread. It is a controller setting, not a capital project. |
| 5. Update your surcharge tables to $5.348. That is the DOE national figure governing surcharges August 5 through August 11. On a falling market, make sure your haulers step it down as fast as they stepped it up. |
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👀 What We’re Watching Next Week
Tuesday, Aug. 11: EIA weekly retail price survey, the first official print to capture last week’s crude break. Wednesday, Aug. 12: EIA weekly petroleum status report; another inventory build would confirm the fundamentals are loosening. Wednesday, Aug. 19: California cap-and-invest allowance auction, a fifth straight sold-out sale keeps that cost embedded in your gallon. Ongoing: the Iranian parliament vote on the Hormuz shipping draft. That is the whole trade right now. Local: first shaker reports out of the southern San Joaquin and Valley heat driving evening pump load.
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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 33 · Published Monday, August 10, 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 August 3, 2026, released August 4) and weekly petroleum status report; AAA Fuel Price Report and AAA Mountain West Group release (August 7, 2026); Reuters, CNBC and market coverage of the August 3–7 crude sessions and the Iran–Oman Strait of Hormuz shipping negotiations; Mont Belvieu propane spot and Henry Hub natural gas quotations (August 6–7, 2026) and EIA weekly natural gas storage report (week ending July 31, 2026); Argus Media and ICE LCFS credit assessments; California Air Resources Board cap-and-invest auction results (May 2026) and auction calendar; California Department of Tax and Fee Administration excise tax rates effective July 1, 2026; CPUC PG&E General Rate Case proceedings and PG&E agricultural tariff schedules; EIA West Coast refinery closure analysis; EIA July 2026 Short-Term Energy Outlook; and USDA NASS 2026 California Almond Forecast.
Cell: (559) 816-3889
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