Between June 6 and June 23, the national average retail price of regular-grade gasoline edged up just 1.04 cents per gallon (CPG), demand continued its impressive recovery, stocks rose a bit, while two benchmark grades of crude oil retreated by a couple of pennies per gallon equivalent, according to the most recent Lundberg Survey of U.S. fuel markets.
So the oil market nourished consumer comfort, essentially not at all freaked out even by Saudi Arabia’s June 4 announcement of a July 1 unilateral trimming of output by 1 million barrels per day.
Those conditions speak well for motorist well-being, at least in terms of comparison to a year ago when the street price was $1.37 per gallon higher.
Nearly one month of the three-month June-July-August “Summer Driving Season” has already been weathered. Both downstream sectors are rowing downstream at the moment, with refiners losing some gasoline margin but still enjoying historically high levels, and retailers gaining a sizable chunk to reach 38.88 cents.
Somewhat lower oil buying price and the rush of competition for sales allowed for deep rack price slashing by refiners in much of the country.
We found the weighted wholesale gasoline price of regular grade trimmed by 12.79 cents in the past two weeks. Thanks to timing, retailers took those cuts and helped themselves to a handy 13.81-cent margin increase, on average. It was just partial recovery from recent margin losses, but a big one.
Meanwhile, diesel fuel continues to play a helpful background role for gasoline consumers as its average retail price dropped a further 3.75 CPG, a salve of sorts for the still-high overall inflation hitting practically all goods as they are moved by truck. The average retail diesel price of $3.9773 is an eye-popping $1.91 lower than it was one year ago.
In 2023, U.S. refiners walk a narrower ledge then in year past as economic and policy factors have culled their ranks and their aggregate capacity. Their performance merits a salute.
A gasoline market appearing stable at lower prices than last year is, comparatively speaking, a nice calm. But a sudden change could transform it to one of high stress.
Barring an important gasoline production reduction whether by weather, scarcity of raw crude or other negative development, July will be blooming with all three downstream parties—refiners, retailers, and motorists—each striving separately for a combined effect of supply-demand success.
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Trilby Lundberg is publisher of the Lundberg Survey of U.S. fuel markets. Lundberg Survey Inc. is based in Camarillo, California.