CAMARILLO, Calif. -- Retail gasoline fell another 24 cents per gallon in the past two weeks, for a total of 60 cents drop in six short weeks. Self-serve regular averages $2.4245, down 23.53 cents since September 8, according to the most recent Lundberg Survey of approximately 7,000 U.S. gas stations.
The drop exceeds the dramatic fall during the prior two week period, as this time crude oil prices slipped $5.70 per barrel, deepening the crash. Contributing to the gasoline price correction was [image-nocss] continued price declines in ethanol markets.
If crude oil prices don't fall further, probably the end of gasoline's down run is near. The gasoline surplus created by maxed-out refining and importing for summer demand with summer formulae is being used up quickly.
Seasonal demand cuts, weak demand in general, less costly winter specifications and lower crude oil prices are reflected in the current retail gasoline price.
The evidence is starting to come in. Lundberg's daily terminal price monitoring shows that in the past couple of days, unbranded racks are up slightly in most Midwest and Western markets, and cuts elsewhere are much shallower than in prior days. Branded product price cuts are slowing; dealer prices, the last to react, were still plunging late last week in most dealer markets.
Refining margins lost again, while retail margins barely budged. There are signs around the country that retail margins are deflating big time; but overall, retail margin erosion does not look to cut the retail price by more than five to 10 cents.
The new national average price of $2.42 is a level much less daunting for demand growthall but arrested earlier this year due to high prices. The chances are good that retail prices will bottom out soon, having nearly everything to do with supply and demand, and very little to do with international or national politics.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.