CAMARILLO, Calif. -- In the past two weeks, regular grade retail gasoline lost 3.23 cents gal., while the light grade crude oil price rose 12 cents per gallon equivalent. The U.S. average regular grade price on the street on December 21 is $2.9720, according to the most recent Lundberg Survey of approximately 7,000 U.S. gas stations.
Near-month NYMEX West Texas Intermediate crude closed at $93.31 on the same day.
Based on state taxable sales, our preliminary data show [image-nocss] that 2007 gasoline demand will eke out a miniscule 0.4% increase over 2006.
Soft gasoline demand due to the annual consumption curve, and extra-soft of late due to price, is hobbling the oil price passthrough: Refiners have been taking higher oil prices in the teeth, thanks to price competition. If crude oil prices change little near-term, we may see some gasoline price increase very soon, but the rest of the price pressure on gasoline probably cannot be alleviated until after January when seasonal demand rises.
Retail margin on regular grade slipped in the past two weeks to nearly 12 cents per gallon after exceeding 15-16 cents from mid-November through early December. For the year 2007, though, it is just above 11 cents per gallon, virtually the same as during both 2006 and 2005.
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