CAMARILLO, Calif. -- After falling 63 cents over 19 weeks ending Oct. 23, the average pump price edged up 0.68 cents per gallon, so the price crash looked to be over.
But the dominant gasoline price determinant—crude oil—stepped in with substantial price cuts and restarted gasoline's price crash. The U.S. average retail price of regular grade is down 10.71 cents in the past two weeks, the lowest price since late January, according to the most recent Lundberg Survey of approximately 2,500 U.S. gas stations.
The current price is more than 70 cents per gallon below its year-ago point.
Street price cutting may well continue for now if the great caveat in the sky—the crude-oil price—does not intervene with a recovery.
Since Nov. 6, when the U.S. average retail margin on regular grade was 18.32 cents, retailers have gained 7.55 cents to a comforting 25.87 cents on average, the widest since mid-September. Click here for more news on retail fuel margins.
Meanwhile, both the light-grade benchmarks dropped and U.S. refiners were passing their lower oil prices through to their wholesale gasoline customers, and then some, thereby losing gasoline margin.
With most seasonal maintenance projects wrapped up, the refining capacity utilization rate is higher. Gasoline stocks are flush.
Motorist demand is growing over that of last year, due in part to falling prices and the discount to last year, but supply outweighs it.
Output-happy refiners and gasoline-thirsty consumers plus improved margin on gasoline have brought retailers good seasonal tidings.
Trilby Lundberg is publisher of Camarillo, Calif.-based Lundberg Survey Inc., an independent market research company specializing in the U.S. petroleum marketing and related industries.