Glut is [image-nocss] the cause, according to Trilby Lundberg of the Lundberg Survey. There is a shortage of demand, she said. There is nothing so destructive to gasoline demand as unemployed motorists, and the number of those has increased. Among many future price scenarios, right now further drops is the most likely.
Meanwhile, retail margin is up sharply, to 20.81 cents per gallon. On September 25, in the majority of cities surveyed, retail margin exceeds 20 cents and is more than double that amount in several markets. The sudden expansion is due to lag time. But for many retailers, hanging on to a gain just a little longer is even more vital these days to their financial survivalthanks to poor throughputs.
In contrast, refiner gasoline margin dropped severely in the past two weeks, but year-to-date is superior to full-year 2008 margin. As with retailers, this is on fewer gallons.
Unfortunately, for the foreseeable future, margin for neither retailers nor refiners is likely to widen enough to offset bad business conditions. And unfortunately for consumers, price is unlikely to fall enough to create decent demand growth.
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