CAMARILLO, Calif. -- Crude oil prices, both main index grades WTI and Brent, rose during the past three weeks, but gasoline prices fell anyway, according to the most recent Lundberg Survey of approximately 2,500 U.S. gas stations. The U.S. average retail regular grade price is down 5.11 cents over three weeks to $2.4480 per gallon. It is down 9.04 cents over five weeks.
The current price sits a whopping $1.16 below its year-ago point.
Oil prices were buoyed by the removal of price discounts that had earlier been built into them by a market expecting sanctions on Iran to be eased, thereby adding to world supply. With the new perception that sanctions aren't likely to be lifted very soon, oil prices have bounced up some.
But U.S. refiners are running capacity at more than 89%. Gasoline supply is very flush. Demand is surging, due to low prices, the discount below the year-ago level and better job numbers.
The whole downstream refining and retailing sector is being rewarded by hot gasoline demand, and has sacrificed gasoline margins. Both refiners and retailers lost some margin on gasoline in these three weeks.
But both refiner and retailer margin on gasoline are still at healthy levels historically, so that there is no acute need to hike price for sake of margin recovery, in the nation as a whole. Unless crude oil prices jump up further right away, the average retail price may well dip down a few more pennies.
Camarillo, Calif.-based Lundberg Survey Inc. is an independent market research company specializing in the U.S. petroleum marketing and related industries.
Click here for previous Lundberg Survey reports in CSP Daily News.
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