CAMARILLO, Calif. -- Self-serve regular gasoline fell 1.92 cents in the past two weeks, to $2.1820 per gallon, according to the most recent Lundberg Survey of approximately 7,000 U.S. gas stations.
This is a tiny decline within the total 84.36 cents cut at the pump since prices peaked three months ago on August 11. It is so much smaller because the causes of the crash, a gasoline glut and falling oil prices, are out of the picture.
In fact, what caused the additional [image-nocss] two-cent decline nationally was reduced profit margins for refiners and retailers. Already, averages retail prices in about one-third of metro markets are up, and several more no longer falling.
If crude oil prices remain around $59 to $60 for near-month WTI on the NYMEX, essentially ignoring the Organization of Petroleum Exporting Countries (OPEC) as they have done of late, then retail gasoline prices will probably soon drift upprobably just modestly, as we are into the low-consumption season with dampened economic growth.
And according to the Associated Press, oil prices slipped Monday, but were off earlier lows after OPEC President Edmund Daukoru said the oil cartel may need to cut production further this year to deal with an oversupply in the market.
Daukoru described the current price of oil as low. Regarding OPEC's decision last month to cut production effective November 1, he said the effects of the reduced output have yet to be seen, but would be soon. He said it will probably be the middle of the month before you will start to believe us.
He told reporters that when OPEC members meet in December, they will discuss production, but it looks as if some further mopping up will be necessary. The market is clearly oversupplied.
Vienna-based analyst group PVM Oil Associates also said Monday that some OPEC members were hinting at another possible cut in production.
Despite the announcement to reduce output by 1.2 million [barrels per day] last month oil prices have remained at a relatively weak level, PVM said.
Oil prices have retreated significantly from a summertime high above $78 a barrel, trading in a range of around $57 to $61 a barrel over the past month as traders look for demand clues in weather and economic forecasts and weigh them against OPEC's plans to curb supplies.
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.