The U.S. average retail price of regular-grade gasoline fell 15.87 cents per gallon (CPG) over the past three weeks and now sits at $3.2683, according to the most recent Lundberg Survey of U.S. fuel markets.
Since September 22 it has declined a whopping 72 CPG.
The pump price dropped mostly because oil prices took a big step down in the same period. In three weeks, the near-month futures price of West Texas Intermediate (WTI) declined by $4.66 per barrel. That's 11 CPG equivalent. Futures gasoline, spot and wholesale prices were pulled down with it, and retail followed suit.
Oddly though, from the point of view of OPEC's longstanding image of a group that can move the market almost at its whim, the oil market appears as if it were spurning OPEC: On Nov. 30, OPEC+--the membership plus 10 other collaborating nations—announced that it would cut world supply by 2.2-million more barrels of oil starting next calendar quarter. It also invited Brazil to join OPEC+, which Brazil is expected to do, adding to its global clout.
But WTI on Nov. 30 slipped down $1.90, then the next day, Dec. 1, it fell another $1.83. So the great bulk of the three-week decline in the WTI futures price can be seen as despite the OPEC+ announcement.
WTI prices had already demonstrated sobriety when the attack upon Israel on Oct. 7, despite potentially grave ramifications to world oil supply due to Iran's involvement behind the scenes. In all, the oil market has not been very skittish during two inputs that in the past might have sent oil prices soaring.
More favorable scenes for consumers: The current pump price is 27 cents below its year-ago point. U.S. gasoline stocks are up. U.S. refiners have upped the aggregate capacity utilization rate dramatically to 90.5%.
One may compare U.S. refiners to OPEC in that OPEC members suffering for oil revenue want supply curtailed, while U.S. refiners who have long been in gasoline margin torment have increased their activity.
Oil traders may see the current WTI price as a floor, approximately. If that proves true, then the national retail average gasoline price may fall little or none, from here. Lundberg's daily wholesale gasoline surveys nationwide show a slowing of the price cuts.
In these three weeks, U.S. refiners took a minor hit to already-depressed gasoline margins. Retailers, meanwhile, lost a sizeable bit of margin, 4.29 cents, but at a U.S. average 47.82 CPG on regular grade, gasoline margin still appears healthy.
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.