Posted in: Infrastructure,
by Patrick DeHaan on Mar 18, 2013 09:46 AM
Crude oil and gasoline spot prices have started the work week by giving up some of their late-week gains from last week. Crude oil was down $1.31/bbl at 9:30am ET Monday while gasoline spot prices were moving lower by 5-6 cents per gallon. Spot prices are a guiding factor for gasoline terminals to adjust their prices, meaning what happens on the market today will lead to terminals adjusting their prices later today after the market has closed.
Even with the downtown early Monday, prices still may spike today in the Great Lakes states thanks to spot prices jumping 10c/gallon Friday in the region, leading terminals to raise their prices to follow. Retail prices hadn't yet shown signs of rising Monday morning at 9:30am ET, but will likely start rising today or tomorrow in Michigan, Indiana, Ohio, Kentucky, Illinois, Wisconsin, and perhaps parts of West Virginia, Missouri, and Minnesota. These states have very different pricing trends than other states and it is easier to forecast movements/changes in retail prices because of it.
Outside of the Great Lakes pricing issue, the national average continues to move slightly lower, and continues to run lower than last year. Monday morning the national average stood at $3.659 per gallon, well under last year's level of $3.809. The same does not hold true in Canada where prices have run above their year ago levels: today Canadians are paying 1c/L more than last year.
Billings, Montana remains the cheapest place for gas in the country with some stations at a mere $3.11/gallon. On the other side of the spectrum, prices in Santa Barbara, California average $4.29 per gallon. Overall, another small spike in gasoline prices is possible as Memorial Day approaches, although not guaranteed.
To start this week, we expect the national average to be little changed, but Wednesday's Energy Information Administration report could show another week of slowing gasoline production as refineries perform maintenance which could propel a rally should the situation continue to hamper supply.