Lundberg Survey Alarms Oil Refiners to Cut Their Selling Prices

oil rig offshore

With the rise in the number of oil rigs emerging after second-quarter lull in oil prices is adding to concerns that US shale production is responding slowly to falling oil prices, extending a global surplus.

According to the Lundberg survey, the average price of a gallon of gasoline in the US has remained stable in the past two weeks, as the price rise in the several Midwest regions offset cuts in the West. Lundberg’s biweekly survey revealed that regular grade gasoline price has dropped just one-third of a cent to about $US2.71 a gallon.

While a boomerang in gasoline supply has aided lower prices in California, motorbikes around the country reeled from increases as the biggest crude distillation unit of BP PLC’s Whiting, Indiana refining remained block for improvement.

The survey sated that the average price of gasoline that has declined by 77 cent per gallon from the same-year-ago period.

A survey publisher Trilby Lundberg in Camarillo said that from this point, big retail gasoline price cuts are very likely, unless crude prices reverse and climb back up to the May and June levels.

The US crude oil marked a new 6-1/2-year low of $39.86 a barrel on Friday following weekly report, which showcased US energy firms added two oil drilling rigs last week – the fifth increase in a row. The installation settled at $US40.45 per barrel.

Thus, with the rise in the number of oil rigs emerging after second-quarter lull in oil prices is adding to concerns that US shale production is responding slowly to falling oil prices, extending a global surplus.

Lundberg said that the lower US crude oil price might cause gasoline retailers, and oil refiners to cut selling prices –spoiling their current wide margins, as they attempt to gain a leg up on their competition. It added that retail gasoline prices may fall down by 20 cents a gallon in the coming weeks, if crude prices do not surge.

The survey ranked Los Angeles as the highest-priced area for gasoline out of the 48 contiguous US states, having $US3.67 a gallon, as compared to $US3.8 in the Aug.7 survey. The lowest crude oil price was in Charleston, South Carolina at $US2.10 a gallon.

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Anna Domanska
Anna Domanska is an Industry Leaders Magazine author possessing wide-range of knowledge for Business News. She is an avid reader and writer of Business and CEO Magazines and a rigorous follower of Business Leaders.

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