By Brian L. Milne, Refined Fuels Editor, Telvent DTN
Drivers across most major metropolitan markets in the United States should see the increase in retail prices at their local outlets freeze in the week leading up to Easter Sunday, with some markets potentially seeing a decrease at the pump. The forecast is based on a decline in wholesale gasoline costs in most markets in the U.S.
In the wholesale market, gasoline costs declined the most in the Midwest as March quickly comes to a close, but that followed sharp increases earlier in the month amid a transition from winter grade product to the more costly to produce summer gasoline blend. In this case, the residual effect in pass through costs will mitigate the recent decline in wholesale costs.
Drivers in states along the Atlantic Ocean should see retail prices at their local markets hold near recent levels or even decline slightly. The market is well supplied with gasoline, augmented by imports from Europe even though gasoline imports have trailed the year-ago and historical rates.
Consumers along the Gulf of Mexico should also expect retail gasoline to hold near recent pump price levels amid a decline in wholesale costs. Typically, these consumers are afforded the lowest costs at the pump due to their proximately to the country’s refining hub in Texas and Louisiana.
For states in and near the Rocky Mountain region, commuters are less likely to see a break in gasoline’s retail price ascent. Regional outages at oil refineries have underpinned local gasoline prices, with the region’s wholesale costs mixed.
Drivers along the West Coast are also unlikely to see a break from gasoline price increases, with the region’s wholesale costs mixed, too. The region is seen as well supplied which should limit the price upside however.
The price respite for many markets is likely to be brief, with the trend still pointed up. The U.S. average price for regular grade gasoline posted a fresh 17-month high midway through March at $2.819 gallon. Expectations call for the average to reach $3 gallon sometime this spring or summer. Ample supply should mean gradual increases at the pump over the next several weeks.
View DTN’s Weekly and Historical Gas Prices.
About the Author
Brian L. Milne is the Refined Fuels Editor for Telvent DTN-a leading business-to-business provider of real-time commodity information services. Milne has been focused on the energy industry for more than 14 years as an analyst, journalist and editor. He can be reached at firstname.lastname@example.org.