This price is a discount of $1.42 under this time last year. Motorists will probably get a deep discount under the year-ago level throughout [image-nocss] the spring/summer driving season. Unless, of course, a gasoline or oil supply shortage develops eruptsextremely unlikely due to shut-in production capacity of both.
Crude has been comparatively stable, floating a few dollars above and below the $50-per-barrel mark, itself signaling deep price discount in case oil demand raises its head. It is chiefly U.S. gasoline demand that will decide where gasoline prices go from here. Under a stable crude price scenario and with continued poor U.S. economic conditions, retail prices should rise quite moderately with seasonal demand. So far this year, gasoline demand has grown a little over the same period in 2008, thanks entirely to low prices. If unemployment deepens and OPEC edges even closer to its official pledged cutbacks (or cuts further at its meeting next month) and oil prices rise, then 2009's summer gasoline demand growth will be blunted.
Fortunately for retailers, margin has recovered, averaging 11 cents for regular and 12 cents pooled. If demand performance turns sour, there will be pressure on margin to expand.
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