It's tougher times for gasoline retailers and for their motorist customers.
The national average retail price of regular-grade gasoline climbed 6.7 cents per gallon in the past three weeks, to $3.289, according to the most recent Lundberg Survey of U.S. fuel markets. The average wholesale price increased far more than that, effectively slashing retail gasoline margin by 6.8 cents. Average margin is now 28.5 cents. The pressure will be on to recover some margin losses.
The long-enjoyed price discount of retail price under its year-ago level is gone, or nearly so. The discount is a mere 1.1 cents. Retail prices were tumbling down at this time in 2024.
‘Summer driving’ has waned and the country’s work and school commuters are faring OK as to gasoline supply, with the big Midwest supply crunch (BP's Whiting, Indiana, complex) resolved, and some West Coast supply glitches also mended. Refining output a still strong 94.9% use rate of total national capacity after a 1.7 percentage points reduction, normal for this time of year.
Crude oil prices are still relatively low, even though news headlines scream about modest ups and downs as the market reacts to fears about both oversupply and under-supply internationally.
While multiple political stresses threaten massive oil price volatility, they are potentials, not yet manifested.
Even the dramatic OPEC+ announcement of a further increase in oil output is less than it may seem: The October increase is far smaller than the increases determined in August and December, and it will be tempered by expected reductions by six “cheaters” that have been overproducing big time, especially Kazakhstan.
Currently, neither oil nor U.S. gasoline supply factors suggest big problems for the U.S. downstream and its customers. From here short term, a return to pump price cutting in a 4-8 cents range appears 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. Lundberg Survey Inc. is based in Camarillo, California.
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