The national average retail price of regular-grade gasoline is up 6.6 cents in the past two weeks, to $3.245, according to the most recent Lundberg Survey of U.S. fuel markets.
Chances are high that further price hikes at retail will occur in coming days. They may dovetail with higher Spring-Summer reformulation costs, if no deep price cuts come in the next few weeks from either gasoline supply growth or crude oil price decline. They may dovetail as well
with higher retail gasoline margin which is sorely needed by many retailers.
It comes from wholesale gasoline price increases averaging 6.2 cents, granting the nation's retailers a very unimpressive 0.4 cents margin improvement. The current 27.8 cents per gallon (CPG) average margin is acute pressure on street prices. Retailers will have to attempt to get well, and soon.
The currently low average retail margin is under extra pressure with inflation haunting the economy, hindering demand.
Extreme winter weather in the East crimped refining and distribution activity, adding to the normal seasonal maintenance at refineries that shorten supply. In the West, supply was curtailed by a fire at northern California's Martinez refinery, hiking prices regionally.
Lundberg Survey's daily wholesale price surveys reveal that the average unbranded rack price in Petroleum Administration for Defense District 5 dropped more than a dime in the past week, manifesting that normalization is under way.
Also in the West, the shift to higher-cost spring gasoline reformation has begun in the first area to be affected, Southern California. It now spreads to the rest of the state and the nation.
Crude oil prices, considering the wild variance among possible changes to world supply and price that may come from changes to sanctions and tariffs, some of which are on hold, are hovering in a rather narrow range. OPEC has all but removed the chance that reversal of prior production cuts will ensue in April. On Feb. 20, West Texas Intermediate closed at 72.57 per barrel, then slid down to $70.40 per barrel the next day.
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.
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