Thanks, Dennis & Emily

For now, street price stability and margin recovery, Lundberg says

CAMARILLO, Calif. -- Retail gasoline prices shed half a cent in the past two weeks, retreating from their all-time record high of July 8 (unadjusted for inflation). Self-serve regular now averages $2.3022, down 0.46 cents, according to the most recent Lundberg Survey of approximately 7,000 U.S. gas stations.

There's Hurricanes Dennis and Emily to thank, for not devastating Gulf Coast facilities as Ivan did last year, and allowing oil prices to slip by $1 per barrel in the two weeks. And, not [image-nocss] any less important to gasoline prices, supplies of both crude and gasoline are more than adequate to meet demand.

The apparent stability of pump prices masks huge variation in regional and local prices moves during the period, as most of the faster-reacting Midwest cities had big retail price drops while most other markets had moderate price increases.

Behind the stable national average price is the good news story of the average retail margin, which improved in all regions of the country after 11 weeks of erosion. In the latest two-week period, for example, the apparent retail margin on self-serve regular widened from a very thin 4.7 cents gallon to an impressive 10.4 cents on July 22. Refiner margins did the opposite, losing recent gains.

In coming weeks, assuming no substantial change to oil and gasoline supply, retail gasoline prices and retail gasoline margins might prove comparatively stable. Currently, the most likely development is modest or moderate downward drift for both.