Supply Up, Demand Down
Record pump price crash, Lundberg says
CAMARILLO, Calif. -- As refining capacity losses from hurricanes Katrina and Rita are reversed and gasoline demand slips, gasoline prices are plunging, according to the most recent Lundberg Surveyof approximately 7,000 U.S. gas stations.In the past two weeks, self-serve regular crashed 25.3 cents per gallon to $2.6587.
This is an all-time record for street price cuts, said Trilby Lundberg.
With further refining capacity returns and heavy gasoline imports, coupled with [image-nocss] the hit to demand, more retail price drops are likely, she added.To the winter demand lull are added demand destruction in the Gulf and some degree of demand shrinkage nationwide.
Average retail gasoline margins are at an all-time record high at the momentbut will probably tumble as the gasoline supply-demand balance normalizes.
Barring a crude oil supply emergency or winter weather extreme enough to put the heating oil market in crisis (which conceivably could hike the value of crude and all its derivatives), the most likely gasoline price direction is down.