The national average retail price of regular grade gasoline gained 4.3 cents per gallon in the past two weeks, to $3.159 per gallon.
Retailers' margin on gasoline did almost the same thing, improving by 3.9 cents per gallon in the period. It is now 32.5 cents on regular.
In the near term, however, there is a good chance that gasoline prices will cease rising and recede, dropping maybe a nickel or more. The chief supporter of that is an enhanced gasoline supply picture.
U.S. refiners have nearly emerged from seasonal maintenance and repair projects. The aggregate utilization rate of national refining capacity is back up nicely, to 90% from 86%. Also, U.S. gasoline stocks stopped shrinking and have expanded some.
At the same time, the nation's demand for gasoline continues to weaken, a promoter of lower prices.
While retail gasoline prices were rising on average, crude oil prices were doing the opposite. West Texas Intermediate, the main U.S. benchmark grade, dropped by $1.69 per barrel in the past two weeks to $58.06 per barrel, the equivalent of 4 cents per gallon.
The crude oil price weakness came mostly from the view by traders that a 28-point peace plan proposal for ending the Russia-Ukraine would unleash more Russian oil and release more diesel and heating oil to supply so many nations soon to face winter. More Russian oil, heavier and distillate-rich in product yield, would dampen the ongoing dramatic diesel price surge. A cessation of hostilities would also allow an uninhibited comeback of Russia's war-damaged refineries to commence.
In the U.S., both downstream oil industry sectors, refiners and retailers, regained some margin on gasoline. Not exactly a Thanksgiving spread, and the spoonful of gravy some with no guarantee of quick-serve seconds. As always, what crude oil prices do next will speak loudly to all downstream parties. If peace plan sentiment is dashed, and optimism is not helped by key European Union leaders promoting Ukrainian resistance to the plan, then prospects of continued oil price cuts and down pressure on prices of refined products will be dimmed.
Retail gasoline margin at 32.5 cents per gallon on regular grade is no banquet—being about 11 cents thinner than it was as recently as mid-October.
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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