CAMARILLO, Calif. -- Over two weeks, the U.S. average retail price of regular grade is up 3.48 cents per gallon to $3.3944, according to the most recent Lundberg Survey of approximately 2,500 U.S. gas stations. This is a far slower rate of rise than during the prior three weeks when it rose 12.03 cents.
Meanwhile, the futures price of West Texas Intermediate (WTI) crude slipped, with most of the decline coming on January 20 the day of the Lundberg retail survey.
Among the many factors buffeting crude, there are two things: one of them is supply concern (two main inputs
right now: they are Nigeria and Iran), and the other is demand concern (mostly on Europe). Crude will be the main decider for gasoline price direction from here.
Even if WTI stays put at its January price of $98.46, retail prices may inch up a few more cents because retail margin has been depressed for several weeks. The skimpy retail gasoline margin can't be sustained for long.
Despite nervousness among some observers causing panicky predictions, there is no severe retail gasoline price spike on the horizon as it would take a serious crude oil supply threat which fortunately is not materializing so far. Gasoline stocks continue to be ample, and U.S. refiners' run rates are low so there is still a substantial capacity cushion despite plant closures and product exports. Economic growth and employment would have to move from anemic to robust in order to bring the surplus capacity online.
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.
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