CAMARILLO, Calif. — The U.S. average retail price of regular-grade gasoline dropped by a modicum of 0.49 cents per gallon (CPG) to $2.2472 , according to the most recent Lundberg Survey of U.S. fuel markets. The price remains within the narrow range of July 10 forward, but in the past month the direction is decidedly down. The pressure is still on for street price cutting.
Retail gasoline margin lost another 3.36 CPG and sits at 25.00 cents. It was a happier 33.67 CPG on Sept. 11 and has been reduced 8.67 cents in a month.
Oversupply is still facing weak demand, and with the world crude oil market not poised for significantly greater price strength, this is most likely the driver of near-term gasoline prices.
As for crude oil, the dominant mover-shaker of gasoline price and price direction, even as OPEC is considering delaying a production increase, within a plan to phase out its sizable April output cut from next January to April, Libya is striving to increase its own production.
Although still very low, Libya's output did approximately triple in the past month. Both elements along with myriad other inputs to oil prices are already residing inside the oil futures price. Oil prices, like gasoline, have been moving within a comparatively narrow range of late.
Hurricane Delta has shut in virtually all the U.S. Gulf Coast oil output as well as idled some refining capacity. But Delta, on top of Hurricane Laura, is also a petroleum demand destroyer, and this at least partially if not entirely offsets the temporary supply cut. The storms' damage is layered over the continued hobbling of gasoline demand by lingering pandemic conditions and the struggling economy.
U.S. retail gasoline prices are still more likely to drop than to rise. Retail margin may well go on being more volatile than price.
Two cities: Within the national sample of metro markets surveyed by Lundberg on Oct. 9, Houston has both the lowest apparent retail gasoline margin and lowest retail price, while the San Francisco Bay Area has both the lowest average price and margin. Our current
snapshot: Houston motorists pay a tad under $1.78 and Houston gasoline retailers garner a couple of crumbs above a nickel. In the costly City by the Bay, margin is just above 65 cents and the pump price is $3.36.
Apart from the gaping wholesale price different between the two markets, the gasoline tax different is a whopping 44 cents.
Click here for previous Lundberg Survey reports in CSP Daily News.
Trilby Lundberg is publisher of the Lundberg Survey of U.S. fuel markets.