CAMARILLO, Calif. -- The U.S. average retail price for regular grade dropped 4.31 cents in the past two weeks, to $2.7501. Important down moves in the Midwest offset a virtual no-change in the East and a rise in the West, according to the most recent Lundberg Survey of approximately 7,000 U.S. gas stations. From here the only down factor for retail price is weakened gasoline demand; all others say up.
Crude oil prices remain high. The U.S. light benchmark added 3-cents-per-gallon equivalent [image-nocss] in the past three days. But the gasoline market is tight, with unbranded rack rising nearly 8 cents nationally in three days, with branded following with nearly 4-cent rise. Dealer buying prices showed 0.6 cents slippage.
There's 40 cents per gallon less incentive for gasoline exporters to send product here than there was in late May when retail prices peaked, so imports are scarcer. Some operational problems at refineries last week added to the already significant capacity idling that refiners require for maintenance and repair this time of year in advance of the heating oil season. A third pressure is that refining margin shrinkage has been acute; refiners will have to make some money soon, because of currently narrow margins during reduced runs. Retail margin regained in two weeks but on average is still single-digit on regular, and downright hungry in many markets.
Unless crude oil prices head down and stay there, retail gasoline cannot.
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