Behind the scenes, here is what went down: Refiners got hit with about $3-per-barrel in crude oil price increases, but instead of hiking wholesale prices by 7 cents per [image-nocss] gallon, they cut wholesale prices by 6 cents.
Retailers, having had unsustainably narrow margin during the prior two-week period, kept most of that 6 cents, restoring retail margin to a healthy width.
That doesn't mean economic health for them of course, since demand is down from 2008. There are fewer employed motorists, lower spending and fewer gallons of gasoline sold. Next month, beginning the downslope of the seasonal demand curve, pressures on the entire downstream will grow as consumption shrinks. In this supply glut, the most likely near-term street price direction is flat, with just small changes up and down. An oil supply disruption could, as always, skyrocket prices, but a gasoline supply disruption could not, due to the large overhang of U.S. refining capacity, glutted stocks and fall's lower demand looming.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.