·
Last week, the US average retail gasoline price continued lower to $2.20
per gallon from $2.30 during the prior week and from $2.73 one month
earlier. As of yesterday, the spot
market price for gasoline was $1.44 per gallon and has roughly held that
level for seven days.
· Retail gasoline prices peaked in early September at $3.07 per gallon and have since fallen 72 cents or 28%. During that period spot gasoline prices are down $1.18 or 45%. The implied rise in gasoline retailers' margins has restored profitability. However, that rise in the retail price of gasoline versus the spot price followed several years of margin decline.
· During the past month margins have
fallen roughly 20%, in part reflecting a decline in gasoline demand of
up to 3.5% versus the year ago level. In turn, lower prices seem to have
revived demand which spiked last week and raised the four week average
level of gasoline demand to roughly even with a year earlier after
declining sharply through September & October. 
· Crude oil prices have continued lower as well. WTI crude yesterday at $57.21 per barrel was down versus an average of $62.50 during October and was 18% lower than the late August high of $69.82.
· In November, natural gas prices reversed some of the strength of the prior three months. During the last three weeks gas prices averaged $10.08/mmbtu versus the high of $13.53 averaged during October. Nevertheless, prices still are up 71% versus all of last year.