CAMARILLO, Calif. -- After rising for eight weeks, to the tune of 42.73 cents, the U.S. average retail price of regular-grade gasoline dropped 0.38 cents in the past two weeks, according to the most recent Lundberg Survey of approximately 2,500 U.S. gas stations.. The new average is $3.8338 per gallon.
Crude oil prices, always the king among inputs to gasoline prices, dropped some eight-cents-per-gallon equivalent between September 7 and September 21. Other inputs to the cessation of retail price hikes include some barrels of U.S. refining capacity idled for Hurricane Isaac and for repairs, are back. Also, ethanol prices easing; reformulations becoming less costly after Summer; and seasonal gasoline demand curving down after August.
Margin on gasoline is flush for both refiners and retailers. Average retail margin on regular grade improved to 17.2 cents per gallon, from the skimpy 9.9 cents on September 7.
If crude oil prices do not jump up from here, retail prices are likely to drift down. There is more from the oil price drop not yet passed through, which will appear if crude oil cooperates. In addition, the nearly 29-cents-per-gallon penalty that motorists are paying compared with the year-ago price is a disincentive to gasoline demand growth.
What crude will do next cannot be known. But two of the influences on oil prices that point down are bad economic conditions, especially in Europe, with slower growth in China--and good oil supply conditions, notably signals that Saudi Arabia is prepped for production hikes.
Meanwhile regular-grade retail margins within markets are as rocky as ever. Around the country they break down approximately into thirds: 18-35 cents, 10-17 cents, and 9.5 cents and below. Year-to-date on a U.S. average basis, margin sits right between calendar year margins of 2010 and 2011.
Camarillo, Calif.-based Lundberg Survey Inc. is an independent market research company specializing in the U.S. petroleum marketing and related industries.
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