Downstream Margins to Crude: Thanks!
Retail gasoline drops 15 cents over 2 weeks, according to Lundberg Survey
CAMARILLO, Calif. -- The U.S. average regular grade price fell 14.87 cents per gallon in the past two weeks, to $3.8472, according to the most recent Lundberg Survey of approximately 7,000 U.S. gas stations. It is down nearly 27 cents from its all-time record high price, $4.1124, of one month ago.
Now, only the Western states have an average retail price of more than $4 per gallon. California, the West's dominant consumer and also the country's, saw retail prices plunge about 22 cents in two weeks, and crash 47 cents since their [image-nocss] prices peaked seven weeks ago.
U.S. retail diesel prices have been falling too, nearly 16 cents since July 25, to $4.6421, and more than 20 cents in a month.
The product price cuts come from crude, which shed $10 per barrel of its value in the past week, and from retail passthrough. Not much from refiner passthrough, though. Refiner margin on gasoline is attractive at last, thanks to the latest crude oil price decline. Regular grade retail margin is healthy too, even after narrowing to about half its July 25 width; on August 8, it was a penny and a half sweeter than in full-year 2007, and year-to-date, it is more than a penny better than full-year 2007.
As Lundberg told CSP Daily News on July 29, "Retailers are very temporarily holding the rest of crude's price passthrough to consumers." They have now delivered it to the street. So motorists have retailers to thank for the latest price drop, while both refiners and retailers have the world crude oil market to thank for their currently good gasoline margins.