CAMARILLO, Calif. -- The average retail regular-grade gasoline price rose 7.82 cents per gallon (CPG) during the past three weeks, according to the most recent Lundberg Survey of approximately 2,500 U.S. gas stations. It sat at $2.3971 on Aug. 11. Higher crude-oil prices contributed, as did the coinciding of refiners shaving their gasoline margins as retailers grew theirs. The U.S. weighted average, wholesale regular-grade gasoline price moved up 3.93 cents, half the amount that the retail price did.
The regular-grade retail margin recovered 3.81 cents since July 21, so its current 17.03 cents is now decent but not festive.
Meanwhile, refiners' gasoline margin skinnied some, but it is still better fed than it was in full-year 2016. Notably, despite year-on-year as well as seasonal gasoline demand growth, and capacity idling by the sector due to some glitches, the high and mighty rate of U.S. refining capacity in use is better than 96%. This is world-class capacity utilization; right now, hobbled Venezuelan refineries are reportedly running at about half that rate.
The Aug. 11 average retail price sits a hefty 23 cents above what it was one year ago; however, it is far cheaper than mid-August prices during 2015, 2014 and 2013, and this is likely lessening the negative impact on consumer demand.
In all, U.S. gasoline supply and demand are both humming the summer song rather well, and downstream gasoline margins are, historically, not bad.
Oil prices are not on a steep upward trajectory; instead, they are bookended between about $40 to $50, as they have been most of the time for the past year and a half. They are bobbing at the upper end of that range, but the futures market is not spooked, as modest price premiums a year from now for two key grades, West Texas Intermediate and Brent, attest. Assuming oil prices do not leap up from here, further retail gasoline price increases, if any, should be minor.
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.