Fuel Prices Likely Headed Lower In Most Parts Of The Country
The national retail gasoline average starts the month at $3.55 per gallon, down almost 10 cents per gallon from where it started April and off by nearly 30 cents per gallon from last year. Numbers are down in every state from the same time last year, some by almost 45 cents per gallon. The exceptions are Michigan, Indiana and Ohio which average about 5 cents per gallon above year ago numbers, and are areas where prices could move even higher.
Refinery issues in the upper Midwest have caused supply issues. The Chicago spot market (where oil companies trade large cargoes of fuel) is more than 60 cents above the futures price. Other spot markets such as New York Harbor and the Gulf Coast are negative to the screen and about 70 cents per gallon less than Chicago.
Analysts are expecting the rest of country’s retail prices to fade slightly. Traders have been very disappointed with gasoline demand figures. U.S. crude stocks moved above 395 million barrels. Inventories have never been higher since the Energy Information Administration has been tracking the data.
Gasoline demand was measured at just 8.415 million barrels per day, a number that evokes February, rather than mid-spring. Four week average demand is now 156,000 barrels per day behind the same period last year. A glut of supply in most areas should spell lower prices in the coming weeks.
Meanwhile, diesel demand faces very uninspiring domestic consumption into June. The price performance will depend on southern hemisphere needs for cargoes from the United States, so it is difficult to get excited about upward prospects for diesel this month.