Crude oil price changes in the past two weeks and in recent months were less extreme than in previous periods. The same is true for gasoline, and for gasoline margins, according to the most recent Lundberg Survey of U.S. fuel markets.
Oil prices were up slightly; gasoline was down, and so were gasoline margins. But changes were modest.
WTI gained 86 cents per barrel in the past two weeks, to $71.24. That price is more than $4 above its low point in the two-week period. The floor under crude oil prices is demand weakness in China, a trend now more accentuated. And if the oil market is expecting a change in oil prices emanating from the incoming Trump presidency, it is for greater U.S. output, which would be a price softener. Speculators express a view that Iran’s hostility toward Israel directly and through proxies has cooled some for the moment, and they say the same about China’s aggressive inroads against Taiwan and around the world. The most often mentioned factor is the White House transition.
In the U.S. gasoline market, demand continues on its seasonal downhill path, convenient in consideration of very slim gasoline stocks on hand. Refiners in the aggregate are running at just over 90% of total capacity.
But they lost margin on gasoline, again, as oil price recovery over the past several days did not translate into gasoline. Lower wholesale gasoline prices ate up some refiner margin. U.S. refiners’ gasoline margins this year are greatly inferior to margin during 2023 and also during 2022.
Retailers lost just over a penny in regular-grade margin in these two weeks, putting the November 22 average at 33.74 cents per gallon(CPG). Loss over the past month:7.27 cents, while costs of doing business are certainly not shrinking.
Thanksgiving: Although the myth that holidays raise demand and raise price is still given air time and ink, this Thanksgiving period will shove gasoline demand down as usual, as Lundberg studies have proven.
Cars are parked for a sizable period at destination, not busy supporting the work commute that they otherwise are. The lower demand during the holiday period hits retailers and on up to refiners and is never a spark for higher prices.
The current retail average gasoline price is 31 cents lower than it was a year ago, not much of an offset to factors weighing on gasoline customers.
Philadelphia retailers suffered a 5.25-CPG contraction in regular-grade margin, to a mere 9.78 cents on Nov. 22. Retail was still edging down, by half a cent, while wholesale price adjustments were an average 4.79-cent increase. Philadelphia margin was a nicer 26.22 cents a month ago.
In Salt Lake City, retailers gained 0.97 cents in regular-grade margin, putting margin at just over 50 CPG on Nov. 22 as wholesale price cuts slightly exceeded those at retail. In this market, margin has maintained some comparative stability, but trails the healthier levels of 53-54 CPG during October.
Click here for previous Lundberg Survey reports in CSP Daily News.
Trilby Lundberg is publisher of the Lundberg Survey of U.S. fuel markets. Lundberg Survey Inc. is based in Camarillo, California.
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