And It's Not Even Summer: Gas Jumps 19 Cents In Two Weeks, Less Than 10% Below All Time High
According to the latest Lundberg survey the average price for a gallon of gasoline in the United States has moved closer to $4, jumping more than 19 cents since mid-March to a level less than 10 percent below its all-time high. And it's not even peak driving season, which typically sees a seasonal jump of at least 15-20% from early spring levels. Per Reuters: " The Lundberg Survey said the national average price of self-serve, regular unleaded gas was $3.765 on Friday, up from $3.573 on March 18, and up 91.3 cents from $2.852 a year ago. Prices in several western U.S. cities are already above $4 per gallon, led by San Francisco at $4.13. Chicago was close behind at $4.11 a gallon, the survey said." What is not surprising is that demand saturation is starting to set in, meaning refinery margins are now going through the window: " The national average would have been higher had refiners and retailers not resisted passing on rising crude oil prices as customers grow less willing to pay what it takes to fill their gas tanks, analyst Trilby Lundberg said in an interview. "Demand has been falling at these prices," she said."
The record high average pump price is $4.112 set on July 11, 2008. Lundberg tracks roughly 2,500 gas stations.
Crude oil prices are higher amid unrest in Libya and elsewhere in the Middle East, as well as a weaker U.S. dollar, which on Friday fell to a 15-month low against the euro.
A falling dollar often lifts dollar-denominated commodities such as oil. This is because some investors use commodities as an inflation hedge, and consumers who use other currencies may view the commodities as cheap and buy more, driving up prices.
U.S. crude <CLc1> settled Friday at $112.79 per barrel, after earlier reaching its highest intraday price since September 2008. ICE Brent crude <LCOc1> settled at $126.65 per barrel, the highest settlement since July 2008.
Even if crude prices do not change, Lundberg said pump prices could rise another dime per gallon as earlier increases work their way into the retail market.
"One gets a little bit depressed talking about it, but we are getting closer" to a $4 per gallon average, though "there is no telling" when or whether it will occur, Lundberg said.
The average price for diesel fuel did top $4 per gallon for the first time since 2008, rising to $4.09 from $3.978 three weeks earlier, and $3.056 a year ago, according to the Lundberg survey, which is done in Camarillo, California.
The lowest average price for a gallon of unleaded gas in the 48 contiguous states was in Tucson, Arizona, at $3.41, Lundberg said. San Francisco had the highest price.
What is certain is that with a several day pass thru lag between crude and
gas prices, following WTI hitting $113 overnight, it is guaranteed that
this week we will see a $3.80+ handle in gas prices. How that will impact the economy is pretty much obvious to everyone except the 3-4 algos and few NYU POMO interns who are left trading the centrally planned capital markets.
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