SPR Release Notwithstanding, Crude & Gas Both Up
Prices had been crashing since May, Lundberg says
CAMARILLO, Calif. -- The U.S. average retail price of regular grade increased 8.58 cents per gallon in the past two weeks, to $3.7008, according to the most recent Lundberg Survey of approximately 2,500 U.S. gas stations. Until now, prices had been crashing since early May.
The amount of the increase at street level precisely mirrors what crude oil did. Crude closed at $99.87 on July 22, up $3.67 per barrel since July 8. Although oil prices dropped briefly after the announcement of Strategic Petroleum Reserve (SPR) [image-nocss] releases, they are right back up, in part because only a small portion of the government-offered oil was purchased.
If crude oil prices had not jumped, retail gasoline prices would have shown either no change or perhaps even a decline because gasoline supply is flush while demand is shrinking. Motorist demand shrinkage is coming from even worse underemployment, while a current retail price penalty of 97 cents per gallon over the year-ago price certainly doesn't help.
During the same period, refiner margin on gasoline fell by nearly nine cents while retailer margin on regular grade rose by that amount; however, retail margin at less than 12 cents per gallon on regular is still substantially below the levels of April, May and June.
Camarillo, Calif.-based Lundberg Survey Inc. is an independent market research company specializing in the U.S. petroleum marketing and related industries.
Click herefor previous Lundberg Survey reports in CSP Daily News.