CAMARILLO, Calif. -- The U.S. average retail regular grade gasoline price dropped 5.44 cents per gallon in the past two weeks, to $3.9127. It is the first U.S. average decline since mid-December and comes thanks to lack of upsurge in crude oil prices, according to the most recent Lundberg Survey of approximately 2,500 U.S. gas stations.
The West Texas Intermediate (WTI) near-month futures stayed within a comparatively narrow range of about $3 per barrel during the two-weeks period, closing at $103.05, a few cents under its April 6 price. Brent crude, another key benchmark, dropped a bit more. The relative lack of volatility permitted gasoline prices to drop, since supplies of finished gasoline remain robust.
Downstream margins, for refiners and retailers, have recovered earlier losses, removing another element of upward retail price pressure. The average retail margin has swelled to nearly 20 cents on regular thanks to the latest wholesale price slashing, and may give up a few cents in coming days.
The pump price drop of about a nickel means that the April 6 price, $3.9671, was the peak price so far this year. It came a month earlier than it did in 2011, and then in 2010.
The peak price this year came six weeks ago in California, where the average price has crashed nearly 15 cents over six weeks. Currently, prices in the West, Midwest and some other locations around the country are tumbling.
Crude oil will decide if pump prices keep falling. If they remain at around $103 per barrel, we may well see further drops of five to 10 cents soon. If crude shoots back up, then gasoline price cutting will be arrested.
Camarillo, Calif.-based Lundberg Survey Inc. is an independent market research company specializing in the U.S. petroleum marketing and related industries.
Click here for previous Lundberg Survey reports in CSP Daily News.
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