The average price for regular gasoline at U.S. pumps fell 4.16 cents in the past two weeks to $3.5969 a gallon, according to Lundberg Survey Inc.
The survey covers the period ended June 21 and is based on information obtained at about 2,500 filling stations by the Camarillo, California-based company.
The average, which reached a year-to-date peak of $3.795 in the period ended Feb. 22, is about 12 cents above the year-earlier price of $3.478 a gallon.
“Behind this moderate drop are regional refinery issues coming and going,” Trilby Lundberg, president of Lundberg Survey, said in a telephone interview. “During the same period, crude oil prices declined moderately, so it is crude oil speaking as well as retail averages regionally.”
Wholesale gasoline prices at the rack have gone through a “regional juxtaposition” over the past month, with gasoline tumbling in the Midwest and soaring on the West Coast, Lundberg said. Unbranded, regular gasoline at the rack in the Midwest saw “a relentless decline” of 51 cents a gallon from June 7 to June 21 as refiners in the region restored supplies in the market, she said.
Unbranded, regular gasoline at the rack on the West Coast jumped to more than $3.20 a gallon on June 19, up from $3.022 a gallon on June 7, after Exxon Mobil Corp. (XOM)’s Torrance refinery near Los Angeles shut its crude unit, Lundberg said. Prices had retreated to $3.0015 a gallon by June 21, she said.
“A substantial downward correction is already occurring in the West,” Lundberg said. The U.S. should see retail prices remain “reasonably steady or slightly decline” unless crude prices dramatically change, she said.
In the last two-week period, refiner margins on gasoline dropped while retail margins recovered, allowing for some relief at the pumps, according to Lundberg. Retailers were making about 21.63 cents a gallon on June 21, an increase of about 11 cents from June 7, she said.
The highest price for gasoline in the lower 48 U.S. states among the markets surveyed was in Chicago, where the average dropped 25 cents in the past two weeks to $4.23 a gallon, Lundberg said.
The lowest price was in Tucson, where customers paid an average of $3.24 a gallon. Regular gasoline averaged $3.73 a gallon on Long Island, New York, and $4.07 in Los Angeles.
Gasoline futures on the New York Mercantile Exchange fell 10.98 cents, or 3.8 percent, to $2.7617 a gallon in the two weeks ended June 21.
In the Chicago spot market, conventional, 85-octane gasoline sank to a 21.5-cent discount to Nymex futures June 21 from a 60-cent premium two weeks earlier, according to data compiled by Bloomberg. Exxon returned the Joliet, Illinois, refinery to service following a turnaround, easing supply constraints in the Midwest that had boosted prices through the early part of the month.
U.S. gasoline stockpiles rose 183,000 barrels in the week ended June 14 to 221.7 million, a nine-week high, according to data from the Energy Information Administration, the statistical arm of the Energy Department.
West Texas Intermediate oil on the Nymex fell 2.4 percent to $93.69 a barrel in the two weeks to June 21.
Crude inventories rose 313,000 barrels to 394.1 barrels in the week ended June 14. Refinery inputs jumped 1.9 percent to a six-month high.
WTI prices may continue their decline this week amid a stronger dollar and concern that the Federal Reserve will reduce stimulus efforts, according to a Bloomberg survey.
Twenty-two of 34 analysts, or 65 percent, forecast crude will decrease through June 28, the survey showed. Six respondents, or 18 percent, predicted an increase. Six projected no change.