Lundberg in

CSP, May 10, 2021:
Low Gasoline Margin Unsustainable
Pump price now $3.02, more to come

CSP, April 26, 2021:
Spring Demand Getting Price Battered
Gasoline prices resume rising

CSP, April 12, 2021:
Pump Price a No-Change, May Drop From Here
Retailers forfeit gasoline margin, refiners gain

CSP, March 29, 2021:
Pump Price Run-Up Is Nearly Spent
Margin relief for gasoline retailers

CSP, March 15, 2021:
Pump Price Beating Continues
The top 3 causes

CSP, February 8, 2021
Highest Pump Price in a Year
Producers gain, downstreamers lose

CSP, May 10, 2021:
Low Gasoline Margin Unsustainable
Pump price now $3.02, more to come

CAMARILLO, Calif. — Still higher corn and ethanol prices, and a still weaker U.S. dollar, are pulling up petroleum prices. The U.S. average retail price of regular-grade gasoline rose a further 5.79 cents per gallon (CPG) in the past two weeks to $3.0191, according to the most recent Lundberg Survey of U.S. fuel markets.

The price premium over the one year ago point is $1.0445. Just since November the price has shot up 83.98 cents.

Arguably, crude oil prices aren't a fresh up factor, because although they are up in these two weeks, they are still nearly a dollar per barrel below what they were in mid-March. And gasoline demand can't be blamed, since the seasonal up-curve is extremely weak thanks largely to the inferior employment level and pump price pain.

And it certainly is not retail margin as culprit, since regular grade margin is down again, this time 6.72 cents. In fact, this margin has been smashed down by one third in the past six weeks. Business margin in practically every business is played down in news stories or shunned as a non-factor, but nevertheless can be a price direction changer. The U.S. average retail gasoline margin on regular grade is currently just 19.92 cents, unsustainable for long. The pressure was already on, especially in some markets, and now it is acute.

This while several cost hike trends continue, including EMV and wages—with increases that are both government-ordered and employer-offered in order to incentivize workers including truck drivers to return.

The May 7 cyberattack on the Colonial Pipeline causing its complete closure is a giant unknown for fuel supply and price. Supply disruption and higher prices are a given, but whether brief blips or sustained volatility and price spike is unpredictable. The impact will depend on the duration of Colonial's paralysis and the degrees and timing of success by shippers and others attempting to substitute volume and delivery by other means. And yes, even gasoline business margins will be part of the picture.

*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.

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