CAMARILLO, Calif. — It was just a 1.9-cents-per-gallon (CPG) rise in the national average retail price of regular grade gasoline in the past two weeks, but even that probably would not have occurred if not for hikes in crude oil prices. Oil prices strengthened by about a nickel-per-gallon equivalent since June 26.
Also contributing to the slight rise at the pump were higher ethanol and renewable identification number (RIN) prices. The weaker U.S. dollar chimed in, adding a bit to crude oil price strength.
Since April 24 when the price bottomed, it has climbed 31.32 CPG. The climb has been less and less steep: nearly 11 cents between May 29 and June 12; then up just over 6 cents by June 26; and now about one third of that amount, according to the most recent Lundberg Survey of U.S. fuel markets.
If it were all up to gasoline, in these two weeks the U.S. average price probably would not have risen at all.
The July 10 average price is $2.2403, a discount of 59.18 CPG under its year-ago point.
Regular grade retail margin slipped a further 4.29 cents, to just 23.38 CPG. This makes an amazing 15 weeks of shrinkage. The U.S. average retail margin for all grades pooled is now a mere 24.9 cents.
With demand destruction so severe, even the "summer driving season" is no picnic. In Houston, for example, with some of the lowest street prices nationally, with regular grade now averaging $1.3710, wholesale prices leaped up in June with retail lagging, and between June 26 and July 20 wholesale climbed nearly 7 CPG, but retail prices decline more than a penny. The resulting margin slash took regular grade down to just 3.44 CPG.
Retail gasoline margin paucity places upward pressure on retail prices, but the power of wounded demand in today's gasoline market easily overwhelms it. Unless oil prices hold position or gain further, then further retail price increases are not likely.
Click here for previous Lundberg Survey reports in CSP Daily News.
Trilby Lundberg is publisher of the Lundberg Survey of U.S. fuel markets.