Gasoline Prices Want To Fall
Lundberg: Will crude let them?
CAMARILLO, Calif. -- In the past two weeks, the U.S. average retail price of regular grade gasoline inched up 5.76 cents per gallon, to $3.6669, according to the most recent Lundberg Survey of approximately 2,500 U.S. gas stations. It comes mostly from slightly higher crude oil prices (up $1.87 per barrel during the same two-week period), with higher ethanol prices making a contribution.
Rises were greater in the West after a refinery output problem at the Torrance, Calif., refinery, but the situation appears normalized: Los Angeles spot dropped 41 cents in the past two weeks, and unbranded dropped about a nickel.
U.S. gasoline prices want to fall, if crude will let them. Gasoline demand is shrinking aggressively during bad economic conditions, and the current price premium, 97.70 cents per gallon over last year's price, adds to the underemployed motorist's price pain. Storm Irene gave demand an extra big kick down.
If no event or perceived supply threat hits crude prices, then gasoline prices may well cease rising and slip from here.
Overall retail gasoline margin recovered ground in the past two weeks, but is still unsustainably low in some markets. Year to date, the U.S. average retail margin on regular grade is 13.39 cents per gallon, and 0.95 cents per gallon above to what it was during full year 2010.
Camarillo, Calif.-based Lundberg Survey Inc. is an independent market research company specializing in the U.S. petroleum marketing and related industries.