CAMARILLO, Calif. -- The U.S. average retail price of regular grade gasoline is up 4.04 cents per gallon (CPG) in the past two weeks to $2.2523. The increases have totaled 8.86 cents since the recent bottom seven weeks ago, according to the most recent Lundberg Survey of approximately 2,500 U.S. gas stations.
The new price puts the discount to one year ago at a dime, narrower now due to prices crashing last year while rising this year, but still enough to give motorists an average savings of $1 per 10-gallon fillup vs. a year ago.
Retail margin regained 3.5 cents, but it still sits below 18 CPG on regular grade, a far cry from the 23 to 27 CPG it often reached earlier this year. Recovery from five weeks ago, when it was a skinny 10.34 cents, amounts to 7.55 CPG. On average, retailers are within comfortable but not celebratory margin territory.
Refiners regained more gasoline margin as well, but levels remain inferior to those enjoyed last spring. For now, both downstream sectors appear to have steadied themselves in safer waters. Meanwhile, gasoline demand growth is good, while fall maintenance projects at refineries are near completion, which is boding well for supply.
Within the latest 4-cent pump-price boost, the Colonial Pipeline break played a role along with other price inputs. The average retail price was already rising pre-break. The resolution of that problem has been accomplished well in advance of the end of the Environmental Protection Agency’s (EPA) specs waivers, which endure through early October. Also, Sept. 15 brought the retail market’s end to summer-grade Reid vapor pressure (RVP) specs generally, so that the Southeast’s Colonial-driven EPA waivers dovetail with the national easing of vapor-pressure specs. Lower gasoline cost to refiners is now flowing through the system and represents a down influence for gasoline prices.
At the same time, oil prices have slipped modestly in the past two weeks. They continue to gently bump and up and down on their mooring of about $40 to $50 per barrel, as they have for many months. Because the market seems to doubt that OPEC's discussions this week in Algeria will bring a production freeze or cut, and because crude is the biggest slice of the gasoline price pie, oil can arguably be removed from a list of probable causes of a continued U.S. retail price increase.
Over coming weeks, absent an oil price surge and considering a likely flush supply of lower-RVP, lower-cost gasoline taking over the market, the average price may soon cease rising if it has not already.
Camarillo, Calif.-based Lundberg Survey Inc. is an independent market research company specializing in U.S. petroleum marketing and related industries. Click here for previous Lundberg Survey reports in CSP Daily News.
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.