CAMARILLO, Calif. -- Nationwide, self-serve regular edged up 4.04 cents to $2.2710, according to the most recent Lundberg Survey of approximately 7,000 U.S. gas stations. This slight rise is smaller than it was in the prior two weeks, and reflects the overall good supply-demand balance. Higher crude oil prices in the past few days and refinery turnarounds kept the price direction upward.
With sufficient crude and gasoline and other petroleum products available for seasonal demand, continued [image-nocss] price stability, at least compared with the first 10 months of this year, appear likely. But the direction is still probably up, because of downstream margin pressure: Refiners currently have the lowest gasoline margins that they have had since February, and retailers' are the lowest since early April. On December 1, there were at least 14 metro markets with retail regular grade margins of less than one penny, and in the largest gasoline market of them all, Los Angeles, the retail margin on regular was less than four cents on average.
Bigger gasoline price hikes might come in the event of extreme winter weather bumping heating oil demand out of balance with supply, or an acutely disciplined OPEC. The Organization of Petroleum Exporting Countries is again chit-chatting with itself in news stories recommending no cut, or a 500,000-barrels-per-day (bpd) cut, or a bigger cut, at its upcoming December 14 meeting, when to date it is not yet known to what degree members have adhered to their November 1 agreement to remove 1.2-million bpd from the market. Its debate is not raising the specter of near-term oil shortage, but reflects its concern about world demand developments in 2007.
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