Retail gasoline prices were uncharacteristically flat in April starting the month at $2.047 and finishing it at $2.050 per gallon. In between prices moved very little. The average daily price change for the month was just 0.18 cents per gallon, making it the least volatile month since November of 2004.
However, May has brought volatility back with a vengeance. Retail prices are up 12 cents between May 1and May 8. The bad news for fleet managers is that wholesale prices are up nearly 35 cents over the same period, indicating pump prices still have a northward tailwind.
Gasoline futures on the New York Mercantile Exchange started the boom, soaring on reports and signs that the economy is improving. Futures prices were up some 117% from where they stood at the market bottom in late December and that pushed wholesale prices of physical barrels higher.
Wholesale prices didn’t match futures’ gains in all cases. However, unleaded terminal gasoline prices were up 30-35 cents a gallon east of the Rockies, with smaller 15-25 cents a gallon increases in western states.
U.S. refiners ran more crude and feedstock last week than in any week since December 5, 2008. With demand still stumbling by all accounts, that could ultimately create more plentiful gas supply before true summer driving weeks.
Total input into refineries last week was 15.077-million barrels per day, which reflected a weekly increase of 465,000 barrels per day. It’s the second
2009 visit to 15-million barrels per day, but the previous trip didn’t last beyond the 15.02-million barrels per day input rate seen just once in early January.
With gasoline demand fractionally lower than last year and diesel and jet fuel at year-on-year deficits of 14.1% and 11.6% respectively, one wonders if 15-million barrels per day represents a ceiling, rather than a spring launching pad for higher runs.
Most analysts believe if production continues at a strong pace and demand remains flat retail prices will struggle to get past $2.30 as high for the year. The sentiment on diesel is mostly bearish. With demand so weak most experts think diesel has no place to go but down
