This Week In Petroleum |
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Released on April 18, 2007 What Season Is It? Looking back to the beginning of this decade, there have been numerous instances when the U.S. average retail price for regular gasoline was actually lower around Memorial Day or July 4 than it was in mid-April. The table below shows that in the seven years so far this decade, the average retail price fell between mid-April and Memorial Day three years, and in four of the seven years it was lower around July 4 than it was in mid-April. Given that prices have risen much more than they typically do during the first part of this year (see the March 14 edition of This Week in Petroleum ), it wouldn’t be too surprising to see prices began to stabilize or decline over the next several weeks.
High prices encourage increases in supply, which eventually lead to falling prices. Of course, it is impossible to know with 100 percent certainty when prices will eventually turn and head lower. Our analysis of recent movements in spot prices and gasoline supplies indicate that when our weekly survey on prices is released next Monday, it will likely show prices very close to those seen this past Monday or possibly somewhat lower. Whether any price decline observed over the next few weeks continues for a substantial period will depend on whether increases in domestic production of gasoline and increased imports are sustained. EIA’s Short-Term Energy Outlook, released on April 10 forecast a monthly average peak for retail prices of $2.87 per gallon occurring in May. While prices as of Monday, April 16 are actually already at that level, it should be noted that the monthly average for April is still considerably less, with the first three weeks averaging just under $2.80 per gallon. Thus, on this basis, the average retail price remains below EIA’s peak price forecasted for this summer. Predicting the timing of retail price movements is even harder than predicting monthly averages. There will inevitably be a lot of weekly fluctuations. But unless spot prices rise again soon, we may be close to seeing the first downward movement in the average retail price for regular gasoline this spring. Yes, Virginia (and all other states as well), it is spring right now, no matter what the thermometer reads. Retail Gasoline and Diesel Prices Increase Again Retail diesel prices were also up this week, rising 3.7 cents to 287.7 cents per gallon. Prices are now 11.2 cents per gallon higher than at this time last year. All regions reported price increases. The East Coast saw the largest increase, with prices rising 4.9 cents to 286.2 cents per gallon. In the Midwest, prices were up 2.9 cents to 286.4 cents per gallon, while the Gulf Coast saw an increase of 3.9 cents to 284.9 cents per gallon. Rocky Mountain prices were up 3.0 cents to 298.1 cents per gallon. Prices on the West Coast saw an increase of 3.5 cents to 295.6 cents per gallon. California prices rose 3.7 cents to 301.5 cents per gallon, 8.2 cents per gallon higher than at this time last year. Propane Inventories Edge Higher Text from the previous editions of “This Week In Petroleum” is now accessible through a link at the top right-hand corner of this page. |
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