As reported here two weeks ago, Lundberg Survey found a 4.9 cents per gallon drop in the U.S. average retail price of regular grade gasoline, and a 5.1 cents per gallon price discount versus the price of a year ago.
Both of those consumer plusses are even better now: The average price fell 10.5 cents per gallon in the past two weeks, to $3.116 per gallon for regular. And the current price is 8 cents lower than it was a year ago.
The retail price cut would have been smaller if not for a gasoline margin loss for retailers, averaging nearly a nickel. The apparent delta between retail price and the weighted wholesale price plus taxes shrank by 4.5 cents to 39.5 cents per gallon.
Refiners didn't fare as well, losing margin on gasoline during the period because their crude oil buying prices rebounded during the period while rack and dealer price increases they charged to their accounts did not keep up.
What the Gaza peace agreement announcement gave two weeks ago, in terms of lower oil prices, other factors, especially the continuing Russia-Ukraine war and rising tensions between China and the U.S. and other nations, took away. Between Oct. 13 and Oct. 20, the near-month futures market price of West Texas Intermediate fell by $1.97 per barrel, the equivalent of 4.7 cents per gallon. Thereafter, though, though Oct. 24, WTI rebounded by $3.98 per barrel, to $61.50. That's the equivalent of 9.5 cents per gallon.
Already the deep rack and dealer buying price cuts of mid-October are now price hikes, and as retailers receive them they will be put under pressure to raise prices on the street.
Momentarily it seems likely that some further retail price cutting may occur, in large part because of weak gasoline demand. U.S. gasoline demand is shrinking year on year. Even though gasoline prices are lower, prices of so many other goods are not, discouraging motorists.
From here it seems likely that any further pump price cuts will be smaller than just seen and be of short duration.
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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