CAMARILLO, Calif. -- The U.S. average retail price of regular grade gasoline is $3.3829 per gallon, down 13.78 cents from two weeks ago and down 20.18 cents in the past month, according to the most recent Lundberg Survey of approximately 2,500 U.S. gas stations. This two-week drop is the largest since last November.
September's lower crude oil prices have run their course, translated into wholesale gasoline by refiners and into retail gasoline by marketers. In the past two weeks, oil prices have been rather stable, with West Texas Intermediate (WTI) down and Brent up in tiny amounts.
Crude wasn't the only cause of lower pump prices: lower ethanol and Renewable Identification Number (RIN) prices, seasonally high refining capacity use rates and lower Reid Vapor Pressure (RVP) caps contributed. But crude remains the Big Daddy of gasoline price determinants. If crude oil prices stay stable, then retail gasoline price cuts will probably soon cease if they have not done so already.
One reason is downstream margins: Refiners and retailers both lost ground in the past two weeks. Refiner margin on gasoline is tight as refiners passing through lower oil prices gave until it hurt. Retailer margin on gasoline, although not tight on average, did shrink by more than a nickel per gallon since Sept. 20.
It would take another significant oil price slide for gasoline price cutting to continue.
The current U.S. average pump price is a whopping 45.46 cents per gallon below the year-ago point. Retail margin sits at 16.70 cents. Meanwhile, retail margin year-to-date slightly exceeds margin during full calendar year 2012.
Camarillo, Calif.-based Lundberg Survey Inc. is an independent market research company specializing in the U.S. petroleum marketing and related industries.
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