CAMARILLO, Calif. -- The Nov. 21 national average retail price of regular grade is down 10.05 cents from two weeks ago; it is down 88.09 cents from the May 2 peak, and down 41 cents from its year-ago point, according to the most recent Lundberg Survey of approximately 2,500 U.S. gas stations.
Crude oil prices dropped again, but furthermore, refiners cut their wholesale gasoline selling prices more than crude dropped. Two weeks ago, both unbranded and branded rack prices were edging up even in the national average, but have reversed course. U.S. refinery run rates are notably high and gasoline stocks are flush. Even as refining margin on gasoline suffers, refiners are cranking out gasoline with fervor.
Retail's 10-cent slide since Nov. 7, lagging wholesale price cuts, brought apparent retail margin up 3.35 cents to an impressive 22.47 cents per gallon.
Upshot: Refiner margin shrank, retail margin grew, and for the year, the former looks to be inferior to 2013 and the latter looks to be superior.
Retail margin so far this year is a tasty 2.3 cents greater than was full year 2013 margin. This year's retail margin will compare well to recent history even if retailers give up a bit of their bounty. If an oil price bounce does not occur, the retail price might slip a few more cents.
World oil supply continues to make for low oil prices, as does money-printing by central banks including the United States, via strengthening the dollar. Observers wonder if Saudi Arabia is of a mind to sacrifice itself, to lead a charge of production reduction that some fellow OPEC members are lobbying for. Even if during OPEC's meeting on Nov. 27, Turkey Day, the price hawks seeking an output reduction should prevail against most expectations, oil prices would not necessarily get a quick and substantial boost.
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