CAMARILLO, Calif. -- In the past two weeks, regular grade gasoline at the pump moved up 1.96 cents to $3.3443 per gallon nationally. It has been a total rise of 8.64 cents per gallon since Dec. 21, five weeks ago, after an 11-week price crash, according to the most recent Lundberg Survey of approximately 2,500 U.S. gas stations.
Crude oil (WTI near-month), meanwhile, rose 5.5 cents per gallon equivalent in the past two weeks and 17.19 cents per gallon since Dec. 21.
U.S. refiners have so far failed to pass through all the hikes in feedstock prices that they have received. Their margin on gasoline remains depressed.
Retailers are receiving wholesale gasoline price increases, and this will continue as refiners pass them through, as will retailers' own passthrough into street prices. The U.S. average retail margin on regular grade lost nearly a nickel in the past two weeks and currently averages less than eight cents per gallon.
There are some tough market conditions. Gulf Coast average retail margin dropped acutely to just 5.5 cents as wholesale climbed but retail had yet to react, instead dropping more than a cent. In the West, unbranded rack rose 17 cents over two weeks. On Jan. 25 alone, PADD 5 unbranded rose 6.4 cents. Los Angeles spot jumped 40 cents per gallon since Jan. 18 due to refining issues. Thanks to rising wholesale and to retail not yet reacting, there are several markets scattered around the country that in our Jan. 25 snapshot had negative apparent margins.
There is pressure on both refiners and retailers to regain margin on gasoline. This pressure will probably cause street prices to rise a few cents more in coming days, unless oil prices plunge.
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.