The Energy Information administration reports that the retail gasoline market saw a small gain, with the national average retail price for regular motor gasoline moving up nearly a penny to $2.91 per gallon. This price is 67 cents above last year. The averages on the West Coast and in California rose two cents to $3.10 per gallon and $3.14 per gallon, respectively.
     The national average price for diesel fuel increased a half cent to $3.13 per gallon, 91 cents higher than a year ago. The West Coast (Alaska, Arizona, California, Hawaii, Nevada, Oregon, Washington) price dropped a penny to $3.23 per gallon, while the average in California moved up a cent to $3.27 per gallon.
     The EIA notes that as Memorial Day weekend approaches, many consumers are starting to pay more attention to gasoline prices, which have risen by about 11 cents per gallon since the end of March. Domestic refineries, which produce most of our gasoline, have already been gearing up for the upcoming summer driving season by switching over to the production of summer-grade products and preparing for higher utilization rates. Prices are influenced by three main factors: the change in price of the major feedstock, crude oil, the higher cost to produce summer-grade gasoline, and changes in refiner margins.
     Over the past five years (2005-2009), regular gasoline retail prices have increased an average of 18 cents per gallon from April to May, when most of the country is required to switch to summer gasoline. However, the EIA says the increase is expected to be just 7 cents per gallon this year. Projected refinery utilization rates that are below seasonal norms, high inventories, and relatively low year-over-year consumption growth are key factors.
     OPIS reported that Oil futures slipped back Wednesday morning to some $76/bbl and as of Friday, Oil prices have dropped to levels not seen since February. Associated Press said Friday that analysts expect oil prices will fluctuate for months in a volatile market created by plentiful oil supplies, sluggish demand and European financial woes that have weakened the euro and strengthened the dollar. Oil, like most commodities, is priced in dollars. A stronger dollar makes crude more expensive for overseas traders holding other currencies.
     The oil spill in the Gulf of Mexico gushing 200,000 barrels a day has so far not affected oil prices, according to analysts. It has not interfered with tankers carrying imported crude to Gulf ports or those taking refined products from there to other parts of the country. There is concern though that the spill could eventually slow shipments if vessels must be scrubbed of oil before they reach port.
     The Energy Department said this week that crude supplies in the U.S. rose by almost 2 million barrels and were well above the average range for this time of year. This means that despite the oil spill, crude prices remain low. Prices at the pump are poised to fall in response.

Chris Nobles
Commercial Fueling
Nella Oil Company