“Prices in the bulk supply (wholesale) markets are dropping. On the West Coast, those average prices are down more than 25 cents in three weeks and you’re going to start to see those California retail prices come down, the same in the Midwest,” said Brockwell. He said Gulf Coast and Northeast prices could stay higher for now because of the cost of shifting to more expensive summer grade gasoline during April.
“The bottom line is we do still think the retail national average is going to hit $4 and it’s probably going to do that in the next week or 10 days, but it’s now questionable in my mind whether we will match the all-time retail average of July 2008, when gasoline hit $4.12 a gallon,” Brockwell said.
After that, he sees prices heading back to an average $3.50, but probably not the $3 per gallon level.
“You have a number of things that are starting to line up that are affecting the market,” said Andy Lipow, president of Lipow Oil Associates. “One is that crude oil inventories are now about 2 percent higher than this time last year. Gasoline inventories are now 3 percent higher than this time last year. Although there have been a couple of delays, we’re seeing the return of refineries from maintenance and operating rates and the production of gasoline is increasing.”Page 2 of 5 | Prev Page | Next Page