CAMARILLO, Calif. — The U.S. average retail price of regular-grade gasoline edged up a mere 0.32 cents per gallon (CPG) in the past two weeks, so in rounded pennies the price remains $2.73, according to the most recent Lundberg survey of U.S. fuel markets.
It probably would have dropped a little if not for an extra-busy U.S. refining facilities maintenance period, made tougher by additional unplanned stoppage of units, especially in the West. The national use rate of refining capacity dropped to below 87%, but it is not very far below normal for the time of year. Wholesale prices in California spiked dramatically but last week were already edging down.
More refinery project completions, the ending of higher-cost summer blend requirements—even in pockets of California where the specs are extra-tough—as well as the annual kick-down of seasonal gasoline demand are likely to usher in a national pump price cut.
The U.S. retail price declined from July 12 to Sept. 13 to the tune of 20.14 cents during the nine weeks, interrupted with a jump of 9.57 CPG from Sept. 13 to 27. The downward crawl seems very likely to resume now.
As a retail gasoline price event, the attacks on Saudi Arabia's oil facilities a month ago were a no-show; the predictions from authorities in that country that output would be quickly restored proved correct. Over the past month, the combined average price of West Texas Intermediate (WTI) and Brent is now a no-change. In addition to other Organization of the Petroleum Exporting Countries (OPEC) member nations such as Venezuela and Nigeria in the throes of internal oil industry difficulties, now there is Ecuador as well. The much smaller producer has for the time being lost output at three oil fields due to protests of Ecuador's announced ending of fuel price subsidies per requirements from the International Monetary Fund (IMF), and supply of the heavy-grade feedstock is significant for some U.S. refineries. Ecuador's internal troubles may or may not play a discernible role near-term in U.S. petroleum prices.
Meanwhile, bright spots for petroleum in the U.S. include oil prices that encourage booming domestic shale oil production and a 24-CPG discount that the current U.S. pump price has under its year-ago point. A low price regime for oil and gasoline favors gasoline marketers in terms of encouragement to demand, which continues to show weak growth for this year and which is about to suffer its normal seasonal depression. Nationally, retail margin is at least alive and kicking at 21.21 CPG for regular, although lower than two weeks ago by 0.41 cents.
Camarillo, Calif.-based Lundberg Survey Inc. is an independent market research company specializing in the U.S. petroleum marketing and related industries.
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