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West Texas Intermediate’s (WTI) closing futures price is nearly the same on Aug. 9 as it was two weeks earlier. It did move down by $3.64 per barrel during the first week, then up by $3.32 per barrel in the second, ending up just 31-cents-per-barrel lower. Despite hour-by-hour changes in the potential threats to world oil supply emanating from acute Middle East tensions, among myriad other world influences on oil prices, oil prices have shown stability.
So it was not any earthshaking change in the oil market that allowed the U.S. average retail gasoline price to drop 5.75 cents per gallon (CPG) in the past two weeks to $3.5254 per gallon for regular grade, according to the most recent Lundberg Survey of U.S. fuel markets. The combined drop at retail during the past four weeks is 8.7 CPG.
Rather, it was the generally favorable gasoline supply picture that allowed the pump price declines. Stocks are ample and the nation’s aggregate refining capacity utilization rate is 91.5%, with just three more weeks of the three-month peak summer gasoline demand period to go.
Especially important to price is the good recovery of operations at the key Midwest refinery, ExxonMobil’s in Joliet, Illinois, now mostly back up and running after bad weather forced its closure in mid-July, that allowed the price drop. In Indianapolis, the average regular-grade price fell 13 cents in the past two weeks.
Favorable to gasoline demand at a time of still-high inflation and other negative trends in the economy is the pump price difference from one year ago. Motorists are currently paying 37.51 CPG less than they were a year ago.
Both downstream margins were more stable in the period than they often are, with refiners and retailers losing some but still faring rather well. In the case of the country’s retailers, regular-grade margin slipped by 2.91 CPG to a still historically livable 35.2 CPG.
Margin being usually as volatile as are retail prices, sometimes even more so, when markets do show remarkable stability it is noticeable.
Among the many big margin changes around the country that always occur, here are two where they were extremely small: In Las Vegas, regular-grade margin was 0.47 CPG skinnier on Aug. 9 than it was two weeks prior. In Jackson, Mississippi, margin was a bare 0.21 CPG wider than it was on July 26.
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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