CAMARILLO, Calif. -- After dropping nearly 26 cents per gallon over eight weeks straight, the U.S. average regular grade retail gasoline price edged up 0.84 cents per gallon to $3.5447 for regular grade, according to the most recent Lundberg Survey of approximately 2,500 U.S. gas stations.
Retail margin shrank by nearly four cents, to a notably low 10.45 cents. It is less than half what it was in early April.
Unless there should be a serious supply reduction of gasoline or crude oil, the U.S. average retail price is likely to continue rising short term thanks to five factors converging: higher crude oil prices; higher ethanol prices, pressure on both refiners and retailers to recover lost gasoline margin; May's federal requirements for lower vapor pressure for much of the country, adding to gasoline cost; and May's seasonal demand increase--however, since industry stocks are ample and the refining capacity use rate has room to expand, retail price hikes from here will probably be small or moderate, not shockers.
Behind the U.S. average are starkly different regional changes. Large and huge retail price declines happened in many West and East markets since April 19, while big hikes hit several Midwest areas. For example, Long Island and Los Angeles pump prices dropped eight cents during the past two weeks while Chicago is up 31 cents per gallon. The PADD 2 average unbranded rack leaped nearly six cents on May 3 alone; the branded average climbed nearly five cents.
The current U.S. average retail gasoline price is 30.05 cents per gallon under the year-ago point and about a dime below the 2012 calendar-year price.
Camarillo, Calif.-based Lundberg Survey Inc. is an independent market research company specializing in the U.S. petroleum marketing and related industries.
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