CAMARILLO, Calif. -- The April 9 U.S. average retail price of regular grade gasoline dropped 11.04 cents per gallon from the April 5 average, according to the most recent Lundberg Survey of approximately 2,500 U.S. gas stations.
Since the recent peak price on Feb. 22, two months ago, the price is down 25.87 cents.
What crude oil prices are doing is almost always the No. 1 determinant of what retail gasoline will do, and in this case there is perfect symmetry: In the past two weeks, the near-month West Texas Intermediate price fell $4.69 per barrel, the equivalent of 11 cents per gallon.
If crude oil prices do not decline further from here, then probably retail gasoline prices will not either. One reason is that gasoline retailers lost margin big-time in the past two weeks, and will need to seek some recovery. Retail margin lost more than eight cents since April 5, and, at just over 14 cents per gallon on regular, is at its lowest point in two months.
Within wholesale channels there have been some stirrings suggesting that the market has bottomed. For example, in the Midwest region which often proves to be a bellwether for wholesale price direction, the average unbranded regular grade rack price jumped more than 9 cents per gallon between April 18 and April 19.
The current consumer experience is favorable to gasoline demand: In addition to two months of street price cuts, the comparison to the year-ago price point is dramatic: a discount of nearly 38 cents per gallon.
Camarillo, Calif.-based Lundberg Survey Inc. is an independent market research company specializing in the U.S. petroleum marketing and related industries.
Click here for previous Lundberg Survey reports in CSP Daily News.
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