CAMARILLO, Calif. — The U.S. average regular grade gasoline pump price is $2.8185 per gallon, down 1.43 cents from two weeks ago and down 4.77 cents over the past six weeks, according to the most recent Lundberg Survey of approximately 2,500 U.S. gas stations.

Probably there is more price cutting to come.

U.S. refiner and retailer margins are each historically healthy, as is gasoline demand. Consumers have the benefits of flush supply and an average price discounted 76 cents under its year ago point.

While the upstream half of the petroleum business, exploration and production, is suffering lower oil prices, the downstream half–the whole downstream including refiners, retailers, and motorists–is having a fortuitous summer driving season.

Gasoline prices have edged down with lower oil prices, and now oil has lost a lot more ground. U.S. refiners are running capacity at an overall 95.5%, more than meeting celebratory high national gasoline demand growth, and their margin on gasoline is in a wide smile.

Retailers, meanwhile, have in these two weeks reversed their ill margin fortune, recovering their deep loss of the prior two weeks and then some: Retail margin on regular had been slashed in half between June 26 and July 10, from 21.4 cents to 10.9 cents. It has swelled to 25.3 cents on July 24. For their part, motorists are demanding more gasoline and getting it, while paying far less than they did on July 25 last year.

Retailers currently have their best margin on gasoline since 2015 began.

Right now, the down price influences on crude outweigh the up influences, so current prices may prevail for a while. If they do, then flush refiner gasoline margins may well mean further sharing of that bounty via price cutting at the racks and dealer tankwagon (DTW). Retailer margin is no longer too narrow to allow street price cutting, and in some markets it is recovered so well that it may shrink back some. In Los Angeles, scene of the still mostly hobbled ExxonMobil refinery, margin on July 24 is more than 49 cents per gallon, after spending several days in bleeding red margin territory.

Year to date, retail margin on regular is close on 16 cents, beaten only by calendar-year 2014.

Camarillo, Calif.-based Lundberg Survey Inc. is an independent market research company specializing in the U.S. petroleum marketing and related industries.

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