by John Keller | Jan 7, 2015 | Fuel Price Management, Fuel Pricing Strategy, Industry News, Retail Fuel Margins
Today the Wall Street Journal reported that US Inventory data predicts gas prices will continue to fall. The article refers to a report that oil and fuel supplies have risen to a record high, pushing gasoline futures to a near six year low.
US stockpiles of crude oil and refined fuels are at the highest level ever, dating back to 1990. In addition, US consumption of petroleum fell slightly. “Gasoline inventories rose by 8.1 million to 237.2 million barrels, the highest level since February 2011, according to the EIA. Analysts expected an increase of 3.2 million barrels.” Nicole Friedman wrote.
Both gasoline and diesel futures are now at the lowest levels since 2009. From a fuel price management perspective, declining retail prices will mean decreased revenue, but if history repeats, increased fuels margins. However, during this season when retail fuel volumes are lowest, we will see retail fuel marketers sacrifice margin to gain volume where they can.
by John Keller | Jan 2, 2015 | Fuel Price Management, Fuel Price Optimization, Industry News, Retail Fuel Margins
The OPIS report today reported that the average US retail fuel margin started the new year at $0.335 per gallon. That margin is down $0.041 from last week, but a whopping $0.209 higher than the equivalent week last year when the average retail fuels margin was $0.126 per gallon.
The six week average was up $0.011 per gallon from last week and reached $0.321 per gallon.
Retail fuel prices across the US have been falling 99 days in a row, according to AAA. And there is no end in sight, with the cost of crude continuing to drop, and gasoline futures dropping as well.
What does this mean from a fuel price management perspective? It means these are the days of margins, when we need to make the best of the time given to us, knowing full well that the market cannot continue like this forever. Soon we’ll enter into the days of transition from winter to summer blends and scheduled refinery maintenance. Typically that means the season of wholesale cost increases and margin decreases.
We can make the best of these days by using fuel pricing software that allows us to react quickly in this volatile environment.
by John Keller | Dec 29, 2014 | Fuel Price Management, Fuel Pricing Strategy, Industry News, Retail Fuel Margins
The OPIS report showed for the week ending December 26 retail fuel margins across the US averaged at the highest levels of the year. The US average this week was $0.376, down only $0.005 per gallon from the previous week.
The year to date retail fuel margin average stands at $0.218, while the Q4 average is $0.303 and the six week average is $0.310.
The average margin at this point is a whopping $0.236 above the equivalent week last year. We’re finishing up 2014 with an overall retail fuel margin of the year that is $0.028 per gallon higher than the overall retail fuel margin of 2013.
From a financial earnings standpoint, the fourth quarter this year finished $0.103 above Q4 of 2013. Couple those improved margins with the increased fuels demand reported lately, and we can expect to see strong quarterly results by publicly traded fuel marketers in the coming months.
by John Keller | Dec 23, 2014 | Fuel Price Management, Fuel Price Optimization, Industry News, Retail Fuel Margins
According to Brian Milne, Energy Editor of Schneider Electric, the months of November and December this year have yielded some of the highest weekly fuel demand numbers of the year.
According to Mr. Milne, two of the three highest weekly demand rates in 2014 happened in November and December. The retail fuels price drop we’re seeing began in mid-October, and since then only two weeks have had gasoline demand below the five-year average. The second week of December had some of the highest retail fuels demand of the year, quite an oddity since typically the highest demand weeks are in the summer months during high travel season.
What does this mean from a fuel price management perspective? Take these high volumes and multiply them times the high margins at the time, and we can expect exceptionally strong financial results from the publicly held retail fuel companies when they report their calendar year Q4 earnings.
by John Keller | Dec 19, 2014 | Fuel Price Management, Industry News, Retail Fuel Margins
The OPIS report today revealed that the average US retail fuel margin jumped $0.045 per gallon to hit the highest level of the year. The average retail fuel margin now stands at $0.381 per gallon. The year to date average is $0.214 per gallon, while the Q4 average is $0.297 and the six week average is $0.289 per gallon.
In 2013, on this equivalent day the retail fuel margin was $0.221 per gallon.
Most analysts believe that retail gas prices will continue to lower over the coming weeks as the drop in crude prices makes its way through the supply chain. Assuming that’s true, we can expect to see margins at similar or dare we say even better levels than we see today.
It certainly is turning out to be a happy time for both consumers and fuel marketers alike.
by John Keller | Dec 18, 2014 | Customer News, Fuel Price Management, Industry News
CST Brands continues its buying spree this month with the acquisition of Landmark Industries, growing their store count by 22. These newly acquired locations are in the San Antonio and Austin area, so they’re right in the CST Brands headquarters back yard.
CEO Kim Lubel is a self-proclaimed “deal junkie” who sees consolidation in the industry as a great opportunity. The CST acquisition of Lehigh Gas GP LLC allows CST to work around a post-spinoff agreement they had with Valero, where they would have been forced to delay acquisitions until summer of 2015. The Lehigh Gas acquisition also allows CST to build the number of stores they wanted, where previously they were limited by the prior year’s EBITDA.
In the past two years, CST opened 60 new stores. In 2015 they may build as many as 45-55 new stores.
The PriceAdvantage team is proud to be a partner in the success of CST Brands. CST has been using PriceAdvantage at all their stores since 2012, and they have a position on the PriceAdvantage Customer Advisory Board. CST is also a customer of Skyline signs, so they can take full advantage of the closed loop fuel price management process from competitor surveys, to price determination, to price execution, and finally to price confirmation.
