CAMARILLO, Calif. -- During the past two weeks, the light benchmark grade crude oil price climbed one penny per gallon more than did retail gasoline, according to the most recentLundberg Survey of approximately 7,00 U.S. gas stations. On February 22, the U.S. average retail regular grade price was $3.1011, up 15.88 cents since February 8. Crude closed at $98.91.
U.S. gasoline demand is still blinking awake after its winter snooze. Assuming no oil price crash, spring demand, absorbing the current gasoline surplus, will run straight [image-nocss] into refiners' low gasoline margins. This is likely to cause a steep gasoline price hike.
Refiners' gasoline margin by one measure is less than 22 cents per gallon; for reference, it was above 76 cents per gallon during the 12-week period February 23 to May 18 last year. Refiners generally will be blamed when gasoline prices begin their own rise in earnest after months of lean times due to high oil buying prices and insufficient passthrough to product prices due to poor demand.
The Organization of Petroleum Exporting Countries (OPEC) must be very happy. Loving the oil price, loving that when crude oil prices calm down or at least stop rising and gasoline prices zoom in spring—which they are likely to do—their customers, the refiners, will be seen as the culprits.
And as usual, retailers of all affiliations will be in the crosshairs, too. When a spike at the pump unattributed to crude occurs, it might serve the overall industry well to remind critics that gasoline margin trends are key factors in consumers prices. Without generally healthy margins for both refiners and retailers, there would be no gasoline consumers. But then, maybe that is what the most extreme industry critics actually seek.
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