Retail gasoline prices tumbled a further 13.18 cents in the past three weeks, to $3.3004 per gallon, according to the most recent Lundberg Survey of U.S. fuel markets. They have been in decline for nine weeks, a total drop of 31 cents.
And the year-ago price discount is good for motorists, with the current price 62 cents lower than it was at this time last year.
Retail diesel fuel prices, too, have been dropping, by 7.74 cents in the past three weeks and a big 24.55 cents since July 12. In the case of diesel, the comparison to a year ago is even more massive: a retail price discount of 83 cents per gallon (CPG).
Motorists are hungry for fuel price cuts thanks in large part to inferior employment data. In particular, the tumbling diesel prices are a broad aid to consumers of goods in general as well as to diesel fuel motorists, as overall price inflation continues to bite budgets.
Oil prices made an acute retreat in these three weeks, due heavily to weak demand in China, and to disappointing demand elsewhere in the world. West Texas Intermediate recovered a little after Sept. 10 as Hurricane (now Tropical Storm) Francine shut in more than 40% of Gulf Coast production. But the near-month futures price closed at just $68.85 on Sept. 13. Francine will continue to curtail fuel consumption as flooding and power outages isolate consumers in affected territory, a softener for price.
In addition to the oil price crash, weak gasoline demand and now the ending of summer-grade gasoline specs are contributing. As seasonal gasoline demand drops further from here, a few more pennies price drop is likely—unless, of course, world or U.S. oil or refined product supply suffers a serious setback.
Year to date through Sept. 13, the all-grades weighted retail gasoline price is more than 12 cents below the full-year 2023 price. Retail margin year to date is down just slightly from full-year 2023, a loss of 1.54 CPG, to 36.96 cents for all grades combined. Although far lower than margin in 2022, it is superior to margin during the years 2018-2021.
Currently, retail margin on regular grade is an attractive 41.2 CPG, down just 1.01 CPG in the past three weeks, as the U.S. average wholesale price dropped nearly as much as did retail.
Price direction reversals batting margins around in two markets: Cleveland retailers suffered a big 12.88 CPG loss of retail margin since Aug. 23, as wholesale price cuts greatly lagged retail cuts. But in Tulsa, retailers had a 10.34-cent drop in wholesale prices on average, while the retail price, in turnaround having plunged nearly 42 cents between July 26 and Aug. 23, moved up a nickel, giving then a momentary margin boost of 15.05 CPG.
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