2023-09-30 04:53:22
according toDow JonesAccording to market data, WTI futures prices rose 8.6% in September, but gasoline prices fell nearly 12% during the same period, and are expected to fall further. Analysts partly attributed this to “seasonality.”
Patrick De Haan, director of petroleum analysis at GasBuddy, noted that fuel prices and demand tend to fluctuate with the seasons, rising in the spring, peaking during the summer driving season, and then falling in the winter.
GasBuddy data shows that the average price per gallon of regular gasoline in the United States on Friday (29th) followingnoon was $3.793, down 5.3 cents from a week ago and regarding 1 cent from the same period last month.
Although overall oil prices have risen in recent weeks,WTI crude oilPrices even hit a 13-month high on Wednesday, but fuel prices remained lower. De Haan said weakening fuel demand, refiners switching to cheaper winter gasoline and California giving refiners early access to cheaper winter gasoline will put downward pressure on gasoline prices nationwide that might last for weeks or a month.
The difference between winter and summer gasoline lies in the different requirements for Reid Vapor Pressure (RVP). RVP is one of the ways to express the volatility of gasoline. The higher the RVP, the faster it evaporates. In summer, low RVP is required due to high temperatures, and in winter, high RVP is required.
The California Air Resources Board has given refiners until October 31 to sell or supply gasoline with a higher RVP than the standard in California, meaning an early transition to cheaper winter gasoline.
Gasoline prices in California, which typically are among the highest in the country, due in large part to state fuel taxes, averaged $6.033 a gallon Friday followingnoon, up 26.8 cents from a week ago.
At the same time, DTN analyst, product manager and editor Brian Milne said that although crude oil prices experienced a surge in September and saw a wave of profit-taking as they hit $100, this is only a temporary trend and there is more to come for crude oil. More upside will continue to support the average price of gasoline across the United States, but it will be well below the summer peak.
Milne said crude prices have risen as concerns regarding crude supplies outweighed worries regarding gasoline, and crack spreads – the difference between crude oil and petroleum products – have fallen sharply, suggesting retail gasoline prices may fall in the future.
According to the U.S. Energy Information Administration (EIA), crude oil inventories in Cushing, Oklahoma, the New York Stock Exchange delivery center, have fallen to the lowest level since July 2022 and are close to the lowest level for normal operations.
According to the Oil Price Information Service (OPIS), on August 31, the price of WTI futures for October delivery on the New York Stock Exchange closed at US$83.63 per barrel, while September reformulated gasoline (RFG) closed at US$116.19 per barrel, with a crack spread of 32.56 US dollars per barrel. Dollar.
WTI futures for November delivery closed at US$90.79 per barrel on Friday, and October RFG closed at US$102.48 per barrel. The crack spread has dropped to US$11.69 per barrel. Tom Kloza, head of global energy analysis at OPIS, said this might mark a new low so far this year. “Refinery gasoline margins have dropped significantly, especially in California.”
He believes that the gasoline rally has ended, and the average national gasoline price may fall by 1 cent per gallon per day in October, but the tone will reverse in the first quarter of 2024 and the rally will return.
Kloza said there are “many” areas in the Great Lakes, Great Plains and Gulf Coast states where retail gasoline prices might reach $3 a gallon, but prices in the West are still higher than in other parts of the country.
DTN’s Milne also predicted that if there are no “major industrial accidents caused by hurricanes threatening Gulf Coast refineries,” then retail gasoline prices will fall all the way to the end of the year, and will not bottom out until January next year.
He predicts that national retail gasoline prices will fall to a range of $3.20 to $3.40 per gallon by the end of the fourth quarter.
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