October 5,2023
Wholesale gasoline prices are collapsing across the US and in California as demand has declined, says the Energy Information Agency (EIA).Demand is lowest in a year.
US Gasoline futures are down 60 cents from mid-Sept this AM.
AAA says SLO County prices are down 23 cents today from a few days ago.AAA posts average prices daily.
Not just gas but oil is heading down in a hurry as well to $83 a barrel this AM – down $13 in only a few days.
Tom Kloza,oil analyst, says gasoline marketers are doing just fine.
“Gasoline marketers today find an average gross margin of nearly 62cts/gal ranging from 33.1cts/gal in Alabama to $1.48/gal in California. It’s about twice the typical profit margin seen before 2022….”
A GasBuddy analyst says gas prices will drop drastically over the next few months in California. Perhaps below $5 per gallon.
Patrick De Haan told the press “With California allowing the transition to winter gasoline to begin immediately, easing supply concerns, we’re likely to see nearly the entire country see gasoline prices trend lower in the week ahead,” De Haan said. “You could say Christmas is coming early.”
Despite high oil prices as an incentive,US oil rigs count is down this October .Five years ago the rig count was near 800 according to Baker Hughes and over 600a year ago. Rather than’ drill baby drill’ riggers are shelving production (see chart).