by John Keller | Oct 31, 2014 | Fuel Price Management, Industry News, Retail Fuel Margins
The OPIS report today revealed an average retail fuel margin drop of $.057 per gallon across the US this week. But even with that steep decline, the average leveled off at $0.312 per gallon, an average margin that is the third highest retail fuel margin of the year, and $.063 higher than this week last year.
The third consecutive week of margins above $0.30 per gallon nudged the year to date margin average to $0.203 and the six week average to a whopping $0.300. The average margin for this quarter is is also above 30 cents, at $0.312 per gallon.
In 2013, retail fuel margin averages dropped $0.12 per gallon over the course of November before rebounding in early December. Even if that pattern were to repeat this year, which is unlikely given the cost of a barrel of crude continues to decline, the Q4 average would still be robust, possibly matching the Q3 average of $0.240 per gallon.
by John Keller | Oct 30, 2014 | Customer News, Fuel Price Management, Industry News, Retail Fuel Margins
An article in CSPNet.com reported the latest C-Store Grab-N-Go research note by Raymond James & Associates shows retail fuel margins were strong in September, following record margins in July and August. September margins were the third-highest average for the month in the past 10 years.
For the entire third quarter, margins hit a record average, beating 2013 by 18%. Retail gasoline margins averaged between 20 and 29 cents per gallon in Q3. Diesel margins were up $0.12 per gallon, 60% higher than 2013.
The Raymond James research is based on following publically held c-store chains including Casey’s General Stores, The Pantry, Susser Petroleum Partners (Sunoco LP), Murphy USA, CST Brands and TravelCenters of America.
by John Keller | Oct 29, 2014 | Fuel Price Management, Fuel Pricing Strategy, Fuel Software, Industry News
A new research study performed by PIRA Energy Group, commissioned by the Fuels Institute, concludes that while global demand for diesel fuel will continue to grow to 2030, the US demand for diesel will peak in 2015 and decrease from 2016 to 2030.
The research study, “An Assessment of the Diesel Fuel Market: Demand, Supply, Trade and Key Drivers”, concludes that US diesel fuel demand will decrease from 4 million barrels per day in mid 2015 to 3.5 million barrels per day in 2030, a decrease of 12.5%.
The demand for diesel fuel in the US light-duty vehicle fleet will triple in size as more diesel vehicles are on the road. But demand will be tempered by increased fuel mileage, hybrids, plug-in hybrids, and electric vehicles.
The demand for diesel fuel in the US heavy-duty vehicle segment will decrease, according to the report. Natural gas and improved fuel mileage will cause the decrease.
What does this mean from a fuel price management perspective? Based on your customer profile at each of your locations, you may see changes in demand for diesel at specific locations, higher in some, lower in others. There may be opportunities for product differentiation in locations where diesel is selling to more vehicles on the street and the competition doesn’t offer that fuel type. As other stores stop selling diesel, there may be opportunities for strong margins in areas where your store provides the only source of diesel. As always, it’s one more area to monitor volume sales and margins gained at individual locations, market segments, and the company as a whole.
by John Keller | Oct 28, 2014 | Fuel Pricing Software, Fuel Pricing Strategy, Industry News, Retail Fuel Margins
According to Lundberg Survey, Inc., unbranded rack prices are starting to rebound, and that means we may very well start to see the average retail fuel price start to bounce back up as well. Read more at CSP.net here.
The retail price of unleaded has fallen $.1818 over the past two weeks to $3.0759. That’s $0.65 per gallon lower than the peak price of 2014 on May 2, and the lowest price in four years.
If we see rack prices drop again, it will be because global supply continues its downward pressure. As always, eyes are on OPEC to see if they continue their recent strategy of strong sales at current competitive but profitable prices, ignoring requests from Venezuela to cut production levels so prices can increase to a level closer to what Venezuela needs to be profitable. The next OPEC meeting is November 26.
My guess is that prices settle at current levels, with perhaps a slight increase, until the OPEC meeting.
by John Keller | Oct 24, 2014 | Fuel Price Management, Fuel Software, Industry News, Retail Fuel Margins
The average retail fuel margin remained at the top level of the year this week, according to OPIS. The average retail fuel margin dipped $0.001 per gallon to $0.369 per gallon. That’s $0.175 per gallon higher than this week last year.
The year to date average inched upward again to hit $0.200 per gallon while the Q4 average broke $0.30 to hit $0.312 per gallon. The six week average is now $0.293 per gallon, the highest of the year.
We’re now counting down nine weeks until the end of the year. Last year, these nine weeks averaged $0.19 per gallon. Even if retail fuel margins go into a free fall through the end of this year, and there are no industry indications that we will, we’re still looking at what will likely be the best quarter of the year.
