No Spike on the Way

Pump price crawls up another 6 cents
Photograph: Shutterstock

CAMARILLO, Calif. — Thanks largely to a modest rise in crude oil prices, the U.S. average retail price of regular grade gasoline climbed another 6.29 cents per gallon (CPG) in the past two weeks, to $2.2212, , according to the most recent Lundberg Survey of U.S. fuel markets. The other price puller, U.S. gasoline demand, did little of the lifting.

"Summer driving" 2020 is nonplus, pale, hindered by economic stresses including joblessness, and by some remaining inhibition from government regulations (including those affecting shops and destinations motorists traditionally enjoy during the season).

Since this year's bottom price point on April 24, the pump price is up 29.41 CPG.  Before that, the price had raced downhill to the tune of 71.76 CPG. The current retail price is a large 52-CPG discount under its year-ago point.

Retail gasoline margin is now 27.67 CPG on regular grade. It shrank by 0.52 CPG in these two weeks, extending a massive margin puncture of nearly 52 CPG since March 27, 13 weeks ago.  Any small bit of margin gained or not lost is always vital to station and store operators, and unarguably is during this maimed business environment.

The June 26 margin on all grades pooled is 29.34 CPG, versus a razor thin 17.53 CPG back on Feb. 21. If it were all left up to U.S. gasoline, the retail price hike would probably have ceased already, so unimpressive is the recovery in demand.

As for crude oil, its price is bolstered a bit, with WTI closing at $38.49 per barrel on June 26, one reason being the aggressive stockpiling by China, which will be waning.

The chances for current retail level being a peak are good, and from here further increases, if any, are likely to be small.  Price may well cascade back down due to weakness in gasoline consumption, if not from a "second wave" of COVID-19, then possibly from multiple waves of business and personal financial failures as government assistance and nest eggs dry up.

Click here for previous Lundberg Survey reports in CSP Daily News.

Trilby Lundberg is publisher of the Lundberg Survey of U.S. fuel markets.

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