Retail fuel prices expected to drop

  • Retail fuel prices expected to drop

    Brian Milne, Energy Editor for Schneider Electric, contributed another excellent update on Convenience Store Decisions today.

    From a fuel price management perspective, the key takeaways are as follows:

    1. Brent crude oil dropped into the mid $90s bbl, below $100 bbl for the first time in over a year.
    2. West Texas Intermediate traded at $90.43, the lowest since May 2013.
    3. Retail fuel prices are likely to drop as much as $0.25 or more over the next 6-8 weeks.

    We know that with the summer travelling season behind us, the annual seasonal trend should show us lower volumes from here through the end of the year. If Mr. Milne’s prediction holds true, and retail fuel margins increase as retail fuel prices drop, we’re heading into a season of strong retail fuel margins through Q4. In 2013, retail fuel margins hovered in the $0.188 to $0.191 range throughout the fourth quarter, and we didn’t see such margin increases. Hopefully 2014 will prove to be more profitable.

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