Fuels

Downstream Margins Shrink

Lundberg: Crude oil up, retail stable
CAMARILLO, Calif. -- Retail gasoline gained less than one cent per gallon in the past two weeks, while crude gained the equivalent of nearly seven cents per gallon, according to the most recentLundberg Survey of approximately 2,500 U.S. gas stations. The July 23 U.S. average retail price of regular grade is $2.7336 per gallon, up 0.77 cents since July 9. WTI near-month crude closed at $78.98, up $2.89 from two weeks ago.

One reason for the difference is lag time; the other is the sloppy gasoline market, awash with [image-nocss] supply and deprived of healthy demand. The glut has gotten deeper. Refiners and retailers each lost margin during the period (3.65 cents and 2.48 cents per gallon, respectively).

When the crude-to-gasoline lag is played out over the next few days, we may see a few more cents at the pump if the oil price holds or margins are regained. But crude could easily slip back some, canceling most or all of gasoline's rise.

One thing appears surepersistent underemployment is keeping a lid on gasoline demand and exerting a drag on its price.

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