CAMARILLO, Calif. -- The U.S. average retail regular grade gasoline price fell 8.76 cents per gallon in the past three weeks, to $3.0043, according to the most recent Lundberg Survey of approximately 7,000 U.S. gas stations. It was the first sizeable drop since early October.
The pump price slumped because crude took a modest dive, to $88.28 on December 7, notwithstanding the decision of the Organization of Petroleum Exporting Countries (OPEC) to not effect another official output hike, and [image-nocss] because refiner margin recovery was very weak during a three-week period.
While nationally, the retail margin has risen nicely, refiner margin is still a shadow of its former self. What crude oil prices do next will certainly dictate what gasoline prices do. But gasoline demand will also guide price: If growth resumes prior to Spring, refiner margin recovery will have to add to price at the same time. Assuming continued flat demand for the next few weeks, and assuming crude does not jump, retail gasoline prices will probably slip further, if only slightly.
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