CAMARILLO, Calif. — After a nine-week decline totaling 55.86 cents per gallon (CPG), the U.S. average retail price of regular grade gasoline is up 4.64 cents over the past three weeks, according to the most recent Lundberg Survey of U.S. fuel markets.
The causes of the price turnaround are stronger crude oil price and U.S. gasoline demand. Both of those, although they are still at severe lows, behaved in a post-health crisis manner.
Crude oil climbed mightily out of its eye-popping negative price of late April, up $12.49 a barrel since April 24, but still closing at just $29.43, an impossibly poor reward for producers. But the oil price climb, together with the U.S. gasoline market, ended gasoline's price dive. In the seasonal gasoline demand curve, we are on the bridge between spring and summer. Combined with the partial lifting of state lockdowns around the nation, demand is showing some life.
Pump price increases are all but sure to continue near term, but they are likely to be modest.
Gasoline prices and margins at all levels are always on the move, and demand being in relative doldrums has not made for an exception.
Especially retail margin. Since April 24, national average retail margin on regular has deflated by close to 27 CPG. Its current width is 32.34 CPG. The weighted average wholesale price rose by more than 31 cents in the same period. As the still-tiny business profit grows slightly with the spotty phasing out of COVID-driven quarantines, many gasoline retailers very hungry for sales held the line against recent hefty rack price spikes.
Although still just a shadow of its normal self, summer gasoline demand with a growing number of freed motorists is bringing cheery news at the station level.
Click here for previous Lundberg Survey reports in CSP Daily News.
Trilby Lundberg is publisher of the Lundberg Survey of U.S. fuel markets.