If retail gasoline travels [image-nocss] up the rest of the way to crude's hike of nearly $8 per barrel in the last two weeks, it will average $3.05 per gallon in the next few days.
Unless crude suddenly crashes, it seems likely that the average price will reach at least $3 per gallon. The margin seesaw happened again. Retail margin on regular fell by more than half, to less than six cents, obliterating its gain of two weeks ago. In about a quarter of metro markets thanks to jumping wholesale, margin was less than one cent per gallon on December 3. Refiner margin on gasoline fell, too. Merely a recovery of lost retail and refiner margin would put the price above that famous $3 marker.
Later, when hard global oil demand data are in, demand strength as a factor in oil price increases can be viewed. But it will not account fully for crude to suddenly exceed $89. As in recent months, part of the rise is attributable to federal monetary policy: more dollars, weaker dollar, higher oil prices equals higher gasoline prices. Between December 2 and 3 alone, the dollar weakened, hiking oil. The worse employment level indirectly played a role: It is suggestive to oil contract buyers that 9.8% unemployment may well spur federal policy to stay on its kick. It is ironic that logically, deeper unemployment hurting gasoline demand would cut prices; instead, it is as if it were instructing prices to go up.
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