By Brian L. Milne, Refined Fuels Editor for DTN
Wholesale gasoline prices at terminals serving cities and major metropolitan areas across the U.S. are continuing their late summer slide, which is aiding consumers during the final weeks of the summer travel season. The lower wholesale costs for retailers are gradually being passed through to consumers, with the national U.S. average posting a decline for five consecutive weeks.
Pump prices at retail outlets do remain well above their summer of 2007 values, but retail gasoline is down 30 cents nationally from a $4.11 gallon record-high U.S. average in early July to $3.809 gal.
The price slide could be interrupted in parts of the country as we head towards the Labor Day holiday due to tightening supply-demand dynamics in some local markets. Poor operating margins for U.S. refiners producing gasoline this year because of spiking crude oil costs have prompted many of these operators to reduce their output and draw down supply levels. In fact, nationwide stockpiles of gasoline have fallen 6.6 percent since late July.
After threatening a move higher earlier this month due to refinery issues, retail gasoline prices in California are set to continue their decline. Gasoline supply moving from the Gulf Coast to the Midwest is helping to thwart higher retail prices in Chicago, but retail prices in the Northeast could buck the downtrend and edge higher during the coming week.
About the author Brian L. Milne is the Refined Fuels Editor for DTN–a leading business-to-business provider of real-time commodity information services. Milne has been focused on the energy industry for nearly 14 years as an analyst, journalist and editor. He can be reached at [email protected].