CSP, October 14, 2024: Crude Oil’s Nerves: Is a Huge Price Hike Coming? U.S. downstream margins suffer big setbacks

CSP, September 30, 2024: Battered by Headlines, Oil Displays Some Inertia Downstreamers lose, consumers gain

CSP, September 16, 2024: Led by Crude Oil and Weak U.S. Employment, Gasoline Price Crash Continues Retail diesel fuel prices also have been dropping

CSP, August 26, 2024: Pump Price Help for Motorists, With Summer Ending Soon Retail margin improves

CSP, August 12, 2024: Gasoline Market (Relative) Stability Pump price is 37 cents discount to 1 year ago

CSP, July 29, 2024: Pump Price Down 3 Cents Due to Oil Decline Downed Midwest refinery shook gasoline prices

CSP, October 14, 2024: Crude Oil’s Nerves: Is a Huge Price Hike Coming? U.S. downstream margins suffer big setbacks October 14, 2024 CSPDailyNews.com Article: The national retail average price of regular-grade gasoline dropped again in the past two weeks, this time 1.85 cents, according to the most recent Lundberg Survey of U.S. fuel markets. The Oct. 11 price is $3.2616, a big 35 cents lower than it was when it bottomed 13 weeks ago. It’s the smallest price cut since July and may well be the last for now. This is because during the same two weeks, station operators and distributors paid 8 cents more for wholesale gasoline. And that was just a partial pass-through of the important oil price increase refiners are now paying. West Texas Intermediate (WTI), for example, rose the equivalent of 18 cents per gallon (CPG) in the same two weeks (near-month futures contract price). Yet the retail price pulled back by 2 pennies. Oil’s price rise is a worsening of the Middle East supply risk premium. Hour by hour, that risk premium may increase further or be converted instantly into a serious supply disruption, as Israel is still weighing how it will respond to Iran’s latest aggressions. Depending upon the targets of an Israeli response, a spread of warfare if the Strait of Hormuz gets plugged, for example, would make oil price hikes of $20 to $30 per barrel. a logical expectation. Simultaneously though, there are factors keeping a lid on oil prices, including Libya’s near complete return of production, continued reduction of over production by some OPEC+ participants, and OPEC’s scheduled production increase for Dec. 1. Also on the downside, the U.S. gasoline market continues its path into low demand season with a special cut coming in less than three weeks when Daylight Saving Time begins. Any gasoline price cutting will be balanced against margin recovery, however, for which there is need. One scenario for upcoming overall retail gasoline prices is a small increase, if oil prices stay close to where they are and refiners and retailers pass through to motorists a bit more of the buying price hikes they have received. Retailers overall lost nearly 8 cents in regular-grade margin in the past two weeks. The current 32.59 cents is not bad, but neither is it very well padded to protect from painful times. Giant caveat as to retail margin: For the many stations that were forced closed by two Southeast hurricanes, or functioning under dire threat from anti-“gouging” laws, any margin at all is on zero, or reduced, volume. So recovery for those retailers is another world of pain altogether. In Atlanta, which now, even if just briefly, has tax inside gasoline at just 31.23 cents, retailers lost nearly 7 cents in margin in the past two weeks, with the average pump price down more than 20 cents and the weighted wholesale price jumping 18.4 cents. In Miami, the Sept. 27 margin of 42.08 cents was followed by just 19.55 cents two weeks later as wholesale prices leaped but retail slippage continued. Seattle’s current margin’s 73.62 cents, which in lots of other markets would look very attractive, is actually sad for Seattle, where the retail price dripped by close to penny while the average pump price climbed nearly 26 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. Issue Date:

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