CAMARILLO, Calif. -- Oil prices have been climbing up due to jitters about unrest in Iran, a pipeline stoppage recovering in Libya and a weaker U.S. dollar vs. one year ago. The price increases have not yet arrived fully at the retail gasoline pump, according to the most recent Lundberg Survey of approximately 2,500 U.S. gas stations.
There is a bit of price resistance at retail, as supply is very plentiful and demand is at a weak point. U.S. refiners are running at evermore spectacular rates, the latest being near 97% of overall capacity. January is the weakest gasoline demand month, and demand is hampered extra now with extreme cold weather in many markets.
Oil prices boosted retail gasoline by 2.72 cents per gallon in the past three weeks, while retail margin was decimated. The current regular grade price is $2.5383, now 16.06 cents above its year-ago point. Retail margin on regular grade was a nice 25.97 cents on Dec. 15; now it stands at a mere 14.26 cents.
Although a few pennies healthier now than it was three weeks ago, refiner margin on gasoline is still too narrow to be sustained for long. Both sectors, refining and retailing, are hurting for gasoline margin. It is tough sledding for the entire U.S. downstream, and significantly better performance may take weeks to manifest.
Camarillo, Calif.-based Lundberg Survey Inc. is an independent market research company specializing in the U.S. petroleum marketing and related industries. Click here for previous Lundberg Survey reports in CSP Daily News.