A very small pump price drop in the past two weeks, the smallest since mid-July, brings the total retail price slide to a big 51 cents per gallon (CPG), according to the most recent Lundberg Survey of U.S. fuel markets. Maybe the national average retail price of regular-grade gasoline will slip further before the end of 2024, because oil’s price drop in the past two weeks made its way into wholesale gasoline but has not arrived on the street.
West Texas Intermediate (WTI), the U.S. light-grade benchmark, lost $4.04 per barrel in the past two weeks, mostly since Dec. 3. Refiners handed it right over in the form of wholesale gasoline price cuts. Lundberg’s weighted average wholesale gasoline price fell 10.32 in the past two weeks.
The retail price slipped down 1.47 cents, causing the U.S. apparent retail margin to swell by an impressive 8.9 cents. That gain, however fleeting it proves to be, puts the Dec. 6 margin at 42.63 CPG, more attractive than margin during full-year 2023.
Oil market perception remains one of glut. On Dec. 6, oil price weakness was not perceptibly aided by the OPEC+ decision to delay an output hike until April and to delay full reversal of cuts until the end of 2026. Again oil price weakness is attributed mostly to weak China demand, and to output rises by some oil producers. The idea of a U.S. energy policy transition favoring oil and gas production and pipeline transportation of Canadian and U.S. volumes counts as a potential down factor for price.
Of note: At the same time, some observers point to indicators of China demand recovery, and to latest oil demand from India now surging, and to superior potential U.S. economic growth as early as 2025 upping U.S. petroleum demand. Those count as potential price strengtheners that may be in the works.
For now, retail gasoline margin is siting pretty and refiner gasoline margin is sad. The refining sector has been hurting for gasoline margin but is churning out product at cutting its selling prices. Now, the aggregate utilization rate of total U.S. refining capacity has jumped a big 3.1 points in the past two weeks, to 93.3%.
Retail looks set to end 2024 with an annual gasoline margin level below those of 2023 and 2022, but far and away better than in 2021.
Two markets that had apparent average margin jumps in the past two weeks; Newark, New Jersey, up close to 9 cents as wholesale dropped a dime and retail price slipped just 1.37 cents, leaving margin at 24.88 cents; and Portland, Oregon, with a leap of 19.79 cents in margin to a good 67.92 cents, thanks to a wholesale price plunge of nearly 21 CPG.
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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