The U.S. average retail price of regular-grade gasoline increased a further 5.93 cents per gallon (CPG) in the past two weeks, to $3.9598, according to the most recent Lundberg Survey of U.S. fuel markets.
It is up 32.25 CPG from six weeks ago. The July 7 price was $3.6373.
In the bigger price trend, the current price is up 69.36 CPG since its Dec. 16 bottom point. Yet gasoline demand has shown healthy growth, after years of inhibition.
Seasonally, demand will be falling off soon. An additional contribution to short-term demand decline will come from the loss of the year-ago retail price discount, formerly huge and now practically nothing, a mere 1.1 CPG.
At the same time, gasoline stocks have been dangerously low. Very low stocks have helped support higher gasoline prices. But refiners have been producing gasoline at an impressive rate.
Despite many news quotes about U.S. refiners hindered by hot weather and stating that refiners' weather struggle was hiking gasoline prices, the U.S. refining capacity utilization rate has been rising strongly. In the past month, it is up impressively and per the latest, refiners are running at 95% capacity. The tight supply/demand balance may be easing very soon. If crude oil prices cooperate, then the spring-summer price increases may soon come to an end if they have not already.
Both of the industry downstream sectors are laboring under historically good gasoline margin at this time. U.S. refiners had been on a losing streak for weeks, but now have had a good rebound. Retailers, meanwhile, managed a modest 1.54 CPG improvement on average, putting the U.S. retail margin at 39.44 CPG, a slim advantage over the margin in effect back on June 23 prior to subsequent deep declines.
In Los Angeles, often at the high end nationally as to gasoline margin, thanks in heavy part to far higher wholesale prices and business costs than elsewhere, the last two weeks delivered retailers a decline of 7.91 cents in margin to a comparatively low 30.48 cents. Retail prices continued their up trajectory with a 16.47-cent hike to $5.2002, while the average wholesale buying price surged 23.67 cents to $3.8819.
Tropical Storm Hilary supply jitters played a role in the latest hikes here, but an aftermath is sure to be idled demand as weather keeps motorists briefly away, and soften price below what it otherwise would have been.
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.