CAMARILLO, Calif. -- The February 4 national retail regular gasoline grade average is $3.1260, up 1.49 cents since January 21, according to the most recentLundberg Survey of approximately 2,500 U.S. gas stations. It was so small because crude oil's increase from $89 per barrel to $92 was followed by a drop back to $89 during the same two weeks.
But in total, we have had 19 straight weeks of hikes: Since September 24, 2010, the price is up 43.69 cents. And virtually every bit of it is crude. Oil demand growth in developing countries [image-nocss] and the weaker dollar have moved oil prices into a new "norm" of around $90 per barrel.
The Federal Reserve's Quantitative Easing was announced on September 21.
Gasoline prices will do what crude tells them to do. The glut of gasoline, poor demand growth from deep unemployment and underutilization of U.S. refining capacity continue, and probably won't be much altered anytime soon. Predictions of $3.50 per gallon (and higher) gasoline prices for this spring/summer may prove to be far too high. The futures crude oil market currently puts the June contract price about $6 higher than now, equating to about $3.28 per gallon for gasoline--not the $15 to $16 per barrel hike that would imply $3.50 per gallon for gasoline.
But what crude actually does, especially with potential Middle East crises, will be the chief determinant at the pump.
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 columns in CSP Daily News.)
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