U.S. Gasoline Rises to $3.36 a Gallon, Lundberg Survey Shows
Source: Barbara J. Powell • Bloomberg • Posted: Monday, January 9, 2012
The price increase covers the three-week period ended Jan. 6 and is based on the Camarillo, California-based company’s survey of about 2,500 stations.
It was the first increase in survey results since the period that ended Oct. 21. Prices are 27.84 cents higher than a year earlier, when the average was $3.0812.
“The price hike is more than the increase that retailers received in wholesale prices,” Trilby Lundberg, president of Lundberg Survey, said yesterday in a telephone interview. “Consumers are being shielded for now from 5 to 7 cents more in price hikes.”
Prices rose as crude oil surged 8.6 percent and as a government subsidy on ethanol expired Dec. 31. The subsidy, enacted in 1978, gave a 45-cent tax credit to refiners for each gallon of the biofuel blended into gasoline.
“Wholesale prices were up 19.5 cents and at least part of the wholesale price increase came from the cancellation of the ethanol subsidy,” Lundberg said yesterday. “It looks as though if crude oil prices didn’t reverse themselves, we would see an additional five to 7 cents” a gallon for gasoline.
Gasoline for February delivery on the New York Mercantile Exchange rose 26.46 cents, or 11 percent, to $2.7516 a gallon in the three weeks ended Jan. 6.
Stockpiles Rose
U.S. gasoline stockpiles jumped 2.48 million barrels to 220.2 million in the week ended Dec. 30, according to the Energy Department. Inventories were up 7.8 percent since Nov. 4 after climbing for six out of eight weeks.
Demand, or deliveries to wholesalers, during the past four weeks was 4.9 percent below a year earlier while overall fuel supplied was down 7.2 percent.
Gasoline demand at the pump in the week ended Dec. 30 sank 14 percent from the prior week to the lowest in more than seven years of records, according to MasterCard Inc.’s SpendingPulse report on Jan. 4. Demand during the previous four weeks was 3.4 percent below a year earlier.
The front-month crude oil contract gained $8.03, or 8.6 percent, in the three weeks ended Jan. 6 to settle at $101.56.
Crude May Fall
Crude prices may fall this week on speculation that Iran won’t block the Strait of Hormuz and as the European debt crisis weakens the euro against the dollar, a Bloomberg survey showed.
Fifteen of 32 analysts, or 47 percent, forecast oil will slide through Jan. 13. Fourteen respondents, or 44 percent, predicted a gain and three estimated there will be little change. Last week, 41 percent of analysts projected a drop.
Crude oil supplies rose 2.21 million barrels to 329.7 million in the seven days through Dec. 30, according to the Energy Department. Inventories at Cushing, Oklahoma, the delivery point for New York-traded West Texas Intermediate oil, fell 2 percent to 29.3 million, the lowest level since November 2009.
On Long Island, regular gasoline averaged $3.60 a gallon in the latest survey, Lundberg said. Los Angeles-area retail stations averaged $3.69 a gallon, which was the highest price in the lower 48 U.S. states among the cities surveyed.
The lowest price was in Salt Lake City, where a gallon averaged $2.86, Lundberg said.