Lundberg in

CSP, February 6, 2023:
Downstreamers Recover Margin
Pump price up again, but hikes may slow

CSP, January 23, 2023:
Pump Price Up on Crude, More to Come?
Retail gasoline margin battered again

CSP, January 9, 2023:
Price Slide Ended (or Interrupted)
Pump price up a dime, margin down 16 cents

CSP December 19, 2022:
Gasoline Price Now a Discount to Year-Ago Price
Another pump price crash, but demand still beaten down

CSP, December 5, 2022:
Supply Improves, Demand Does Not
Fuel prices crash, courtesy of U.S. refiners

CSP, November 21, 2022:
The Bumpy Retail Margin Road
Gasoline price down 8 cents—more to come?

CSP, February 6, 2023:
Downstreamers Recover Margin
Pump price up again, but hikes may slow

On Feb. 3, the U.S. average retail price of regular grade gasoline is 12.04 cents per gallon (CPG) higher than it was two weeks ago. The current price, $3.5742, is 30.9 cents above its bottoming out point seven weeks ago, and 2.65 cents above its year-ago point, according to the most recent Lundberg Survey of U.S. fuel markets.

The pump price hike was accompanied by a weighted wholesale price drop of 8.86 cents from refiners, as they shared a lower oil buying price benefit with jobbers and retailer customers. Oil prices slipped notably during the period, with West Texas Intermediate’s (WTI) near-month futures price closing at $73.39 per barrel.

Flanked happily between lower wholesale and still-rising street levels, retail margin did a nice bounce of 20.74 cents, to 40.29 CPG. At the retail price pit point in mid-December, retail margin had been a far superior 52.4 cents, when they began a steep five-week shrinkage period to Jan. 20’s mere 19.55 cents.

From here, crude oil, which always holds the directional baton, may continue its months-long gyration of movements within approximately $10 per barrel. The Feb. 3 price happens to be within just 38 cents per barrel of where it started a month ago.

The now bigger gasoline supply may be notably less flush when several more refining maintenance and repair projects are underway pre-Summer, but it may not create an up-price pull since the nation’s gasoline demand is decidedly poor. Some press reports, reflecting very short-term weather changes and translating them into a gasoline price trend, are innocently visualizing the month-to-month seasonality of demand and suggesting a price pump from “strong” demand. January was 2% poorer than January of 2022.

In coming months, prospects for demand recovery aren’t bright, with jobs growth heavily for part-time employment positions and the fact, often omitted in consumer behavior discussions, that gasoline price is impacted by inflation, which remains elevated.

Now that both refiners and retailers have seen some gasoline margin recovery, that price increase factor has been reduced. Although crude oil prices do surprise, it won’t be due to an immediate move by OPEC+, which has just elected with no fanfare to keep its production target unchanged.

One market left out of the overall average margin gain is Las Vegas, where retail prices rose 15.45 cents in the past two weeks and wholesale, rather than dropping, edged up a further 6.02 cents. Result: Las Vegas gasoline retailers are pocketing 9.43 cents less in regular-grade margin, now just 27.18 CPG on average.

Click here for previous Lundberg Survey reports in CSP Daily News.

Trilby Lundberg is publisher of the
Lundberg Survey of U.S. fuel markets. Lundberg Survey Inc. is based in Camarillo, Calif.

Tel:(805)383-2400  Fax:(805)383-2424