CAMARILLO, Calif. -- The October 5 U.S. average retail price of regular-grade gasoline is $3.8375, up 0.37 cents from September 21 two weeks ago, according to the most recent Lundberg Survey of approximately 2,500 U.S. gas stations. This virtual "no-change" is brought to you by opposing price trends in California versus the rest of the nation.
Outside California and some nearby markets, prices in most markets dropped as lower crude oil prices had already made their way to the street. But California's average retail price leaped 40 cents per gallon.
Refining issues in California persist, although some have already been resolved. The big added element this past week was ExxonMobil's Torrance refinery in Southern California being knocked out of commission by a power outage. The refinery is back up.
(See Related Content below for additional CSP Daily News coverage of the situation in California.)
There have been some scattered station outages, none of which appear to have been supplied via branded contract, accompanied by hue and cry in news stories suggesting a fuel shortage and much more price pain to come; however, there are strong indications that the supply tightness and price spike are already ending. Not only is that major refinery already running again, but the spot price in Los Angeles has crashed 40 cents per gallon between October 3 and October 5 according to our spot survey, from $4.2495 to $3.85. Following spot as usual, unbranded rack all over the West fell 12 cents from October 4's $4.0284 to $3.9075 on October 5. From here, it is left to branded rack and dealer tankwagon prices to follow suit.
Lundberg's daily surveys of all wholesale trade channels will show in the next two or three days whether California's spike is over.
Fortunately, the last several days' extreme price increases were met with most retailers' response to quickly hike their street prices. This prevented a shortage of gasoline; if they had frozen, widespread outage would have been guaranteed.
Refiner margin snapshot October 5: Now swollen, so the ability to cut wholesale prices is at hand. U.S. average retail margin on regular, October 5: Slashed approximately in half to just over eight cents. In cities where wholesale hikes were hitting fast and furious, retail has yet to respond, translating to negative margins on October 5, especially in Southern California and Arizona. San Francisco margins are skinny, but positive. They are looking decent on October 5 elsewhere such as Miami, Long Island and Chicago. Overall, retail margin is due to a correction on the upside.
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.