CAMARILLO, Calif. -- In the past three weeks, the U.S. average self-serve regular price rose 8.77 cents to $2.3008for a total rebound of nearly 17 cents since the price bottomed out on December 2, according to the most recent Lundberg Survey of approximately 7,000 U.S. gas stations.
There had been nearly 88 cent drop since the all-time record high price in early September, as refining capacity recovered from hurricane damage and gasoline demand suffered from high prices. The current upward price [image-nocss] trend is accompanied by slimmer margins for both refiners and retailers, starting out the New Year with tighter belts.
The stage is set for both short-term and longer-term price hikes, short term because the crude oil price, up about $6.00 bbl. in the past three weeks, is not yet reflected in wholesale or retail prices, and because of the price pressure that margin shrinkage indicates, and longer term because whatever crude oil does, refiners and marketers will cope with the costs and supply tightness associated with 2006 reformulations of both gasoline and diesel for lower sulfur plus the twin blows from the Energy Bill for mandated ethanol use and a de facto clarion call to avoid use of MTBE.
Lundberg's mid-case retail gasoline price projection done late last year for late July 2006 was a hike of 57 cents at the pump. It might prove quite conservative. Always a wild card, the crude oil price is supported by world oil demand growth, and additionally now by nervous response to headlines from several petroleum producing countries including Iran, Venezuela, Bolivia, Ecuador and Nigeria.
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