Lundberg in

CSP, Nov 20, 2023:
Oil Market Removes Risk Premium From Price
Pump price drops again

CSP, Nov 06, 2023:
Pump Prices Down, Back in Sync With Oil
Downstream gasoline margins improve some

CSP,Oct 23, 2023:
Pump Price and Margin Both Down
Project this—oil price up, down or sideways?

CSP, Oct 12, 2023:
Pump Price Drops 12 Cents, With More to Come?
Oil price crashes, trembling from Middle East news

CSP, Sep 25, 2023:
Oil’s New Price Range, Motorists’ New Pain
Pump price 20 cents over year-ago price

CSP, Sep 12, 2023:
U.S. Downstream Loses to World Producers
Oil price hikes coming to the retail pump

CSP, Nov 20, 2023:
Oil Market Removes Risk Premium From Price
Pump price drops again

November 20, 2023 Article:
The U.S. average retail price of regular-grade gasoline dropped a further 11.65 cents per gallon (CPG) in the past two weeks, to $3.4265, according to the most recent Lundberg Survey of U.S. fuel markets.

The price has been falling for eight weeks. The total pullback since September 22 is 56 cents.

This recent price-cutting, plus the wide discount of 56 CPG that the current price is to its year-ago point, make a good incentive for consumers to drive at an opportune time with holidays fast approaching.

The oil price, representing by far the biggest mover in gasoline’s price direction, had a spasm of concern after the attack on Israel last month, which caused the addition of a supply risk premium. The world market had reason to worry that the attack could well usher in a wider regional war and implicate oil supply, especially from Iran.

In fact, oil supply is more abundant than policy commenters had been expecting, since both Iran and Russia have managed to keep their oil exports robust despite sanctions, and in Russia’s case, a price cap intended to cut its sales and revenues.

That risk premium has been canceled. In the past two weeks, the near-month futures price of West Texas Intermediate (WTI) dropped the equivalent of 11 CPG, within one penny of retail gasoline’s price decline.

Putting aside the major caveat of Middle East unknowns, if oil prices are approximately stable from here, then one likely price scenario for retail gasoline is stability or modest changes in either direction.

In the past few days, Lundberg data are revealing good-sized price cuts in many wholesale markets around the country, especially unbranded rack and especially in the Midwest and West.

The nation’s gasoline retailers gained margin in these two weeks, an expansion of 4.1 cents to 52.11 CPG on average.

At the same time, U.S. refiners, already laboring under acutely low margin on gasoline, have seen margin narrow again, and this will put upward pressure on wholesale prices to be higher than they otherwise would have been. Crude will still be king among influencers, but if oil price changes are not significant short term, gasoline price cutting could well cease.

Premium-grade gasoline at retail, meanwhile, shed 11.22 CPG and diesel fuel declined by 8.94 cents.

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, California.
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