The June 9, 2023, national average retail price of regular-grade gasoline is $3.6662 per gallon, up 2.95 cents since May 19, according to the most recent Lundberg Survey of U.S. fuel markets.
During the three weeks, oil prices—both the West Texas Intermediate (WTI) and Brent benchmarks—were down some.
One year ago on June 10, 2022, the street price was $5.0990. It was the all-time highest ever retail price. So it is the one-year anniversary of the all-time record price. The price difference: $1.4328. What a discount.
And gasoline demand is loving that huge discount.
It helps a bit too that retail diesel prices, down 8 cents per gallon (CPG) on average in the past three weeks to $4.0149, and a massive one-year discount of $1.8437, makes prices of most goods and services lower than they otherwise would be, are a background support to consumers in general and to gasoline demand. Since February 3 alone, retail diesel is down 84 CPG.
After years of struggle following the pandemic’s lockdown conditions, gasoline demand is at the dawn of its “summer driving season” and refiners are pushing hard to supply a market lower than normal stocks.
The utilization rate of total refining capacity has climbed to 95.8% in early June.
If oil prices decide that Saudi Arabia’s decision to unilaterally cut its output by a further 1 million barrels a day in July will more than offset observable demand weakness in some parts of the world, and, especially, if a new U.S.-Iran agreement proves more than chatter and will soon become reality, then oil won’t be helping to moderate gasoline prices anymore and will instead add to gasoline’s upward price pressure.
In these three weeks refiners hiked wholesale prices and retailers have yet to pass through the hikes to motorists. That pressure is worth a few pennies already and demand appears able to stomach such a pass-through.
Timing is all and all unknown, but the current gasoline price picture is evolving to that of strength—perhaps a little now, and maybe much more later as summer unfolds.
Jackson, Mississippi, appears at the low end among metro markets in terms of retail price and of margin. Retail margin narrowed by 4.44 CPG in the past three weeks, a partial recovery from deep losses suffered by retailers in this market since mid-April. Between May 19 and June 9, wholesale gasoline prices climbed 8.62 cents on average while retail prices were still drifting down by 2.24 cents. Average regular-grade margin on June 9 is a too-skimpy 11.53 cents.
Click here for previous Lundberg Survey reports in CSP Daily News.
Trilby Lundberg is publisher of the Lundberg Survey of U.S. fuel markets. Lundberg Survey Inc. is based in Camarillo, California.