CAMARILLO, Calif. -- An August 10 survey of gas prices shows a decline of 10.72 cents for regular, to $2.7771. This is a total decline of 28 cents in a month, and nearly 41 cents in three months from the all-time high record price on May 18 of $3.1827, according to the most recent Lundberg Survey of approximately 7,000 U.S. gas stations.
In California, the nation's biggest gasoline consumer, the average regular grade retail price has crashed more than 53 cents during the past 14 weeks to $2.9073.
The retail price slide was extended by sizeable crude-oil price slippage during continued normalization of domestic gasoline output and high gasoline imports. Very near term, smaller retail price cuts or no cuts seem likely.
Summer demand is not over. It would take significant further oil price cuts to offset the positive effect on consumer demand, and the negative effect on gasoline exporters, of these much lower gasoline prices. And, large oil price cuts do not appear likely.
Late last week, unbranded rack prices rose slightly on average in the West and Midwest, and ceased dropping in most other areas, according to the survey. The U.S. average unbranded rack has hovered right around $2.09 since it shed 7.6 cents on August 7.
Branded rack and DTW price cuts slowed dramatically and ceased in some locations. Retail prices edged up in two Midwest markets in the past two weeks, and fell less than a nickel in two other Midwest cities plus far-flung Alaska and Hawaii.
Unless world economic conditions make oil demand slip and prices fall, the U.S. gasoline price decline will probably soon lose steam and halt. Lower prices will encourage demand (41 cents nationally and 53 cents in California in recent weeks are good incentive). So will daylight driving opportunity, which by government decision is expanding this year at the end, as it was at the outset of, this year's Daylight Saving Time. And by then, oil prices may reflect the strength of global oil demand seasonality due to the heating oil consumption curve.
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