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U.S. Gasoline Falls to Nine-Month Low in Lundberg Survey

Rebecca Penty & Dan Murtaugh - Oct 20, 2013 2:27 PM ET

 

The average price for regular gasoline at U.S. pumps fell to the lowest level in
almost nine months as crude-oil price cuts reduced costs.


Regular gasoline slid 2.01 cents in the past two weeks to $3.3628 a gallon, the
least since Jan. 25, Lundberg Survey Inc. said today.


Gasoline fell as U.S. benchmark West Texas Intermediate crude dropped
$3.03, or 2.9 percent, to $100.81 a barrel on the Nymex, in the two weeks to
Oct. 18. The survey conducted the same day is based on information obtained
at about 2,500 filling stations by the Camarillo, California-based company. The
average gasoline price marks six weeks of declines.


“It would take another substantial downturn in crude oil for the retail gasoline
price decline to continue,” Trilby Lundberg, president of Lundberg Survey,
said today in a telephone interview, noting that wholesale gasoline margins
have narrowed. “The squeeze is on, so we can probably expect that wholesale
price-cutting will probably slow or ease.”


The average gasoline price, which reached a year-to-date peak in the survey of
$3.795 on Feb. 22, is 39.01 cents below the year-earlier price of $3.7529 a
gallon.


The highest price for gasoline in the lower 48 U.S. states among the markets
surveyed was in the San Francisco Bay Area, at $3.81 a gallon, Lundberg said.


Albuquerque Lowest

The lowest was in Albuquerque, New Mexico, where customers paid an
average of $3.03. Regular gasoline averaged $3.55 a gallon on Long Island,
New York, and $3.75 in Los Angeles.


Gasoline futures on the New York Mercantile Exchange rose 6.56 cents, or 2.5
percent, to $2.6732 a gallon in the two weeks ended Oct. 18.
Futures climbed two weeks in a row as refineries reduced rates amid
maintenance and lower margins. U.S. plants processed 14.9 million barrels a
day of crude and other feedstocks in the week ended Oct. 4, the lowest amount
since April 26.


Gasoline stockpiles were 7.1 percent above the five-year average for the time
of year as of Oct. 4, according to data from the Energy Information
Administration, the statistical arm of the Energy Department.


The EIA, which was closed as part of the government shutdown, tomorrow
will release data for the week ended Oct. 11.


Crude inventories surged 6.81 million barrels to 370.5 million Oct. 4, the
biggest gain since the week ended September 2012, EIA data show.


Cushing Supplies
Supplies in the market hub Cushing, Oklahoma, slipped 168,000 barrels to
32.6 million last week, according to the EIA. Stockpiles at the hub have
dropped 34 percent since June 28 as improved pipeline networks and
shipments by rail eased a North American supply glut created by rising oil
production from shale formations.


West Texas Intermediate crude probably will rise this week to the highest
level in three months as refineries cut processing, a Bloomberg survey
showed. All nine analysts who responded to the survey forecast an increase.


To contact the reporters on this story: Rebecca Penty in Calgary at
rpenty@bloomberg.net; Dan Murtaugh in Houston at
dmurtaugh@bloomberg.net.
To contact the editors responsible for this story: Sylvia Wier at
swier@bloomberg.net; Dan Stets at dstets@bloomberg.net.


FUTURES AND OPTIONS TRADING INVOLVE SIGNIFICANT RISK OF LOSS AND MAY NOT BE SUITABLE FOR EVERYONE. OPTIONS, CASH AND FUTURES MARKETS ARE SEPARATE AND DISTINCT AND DO NOT NECESSARILY RESPOND IN THE SAME WAY TO SIMILAR MARKETS STIMULUS. A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES & OPTONS CONTRACT BEING OFFERED. SEASONAL DEMAND AND CURRENT NEWS IN COMMODITIES ARE ALREADY REFLECTED IN THE PRICE OF THE UNDERLYING FUTURES.