The WEXIndex report for Sept. announced that traditionally, the end of summer brings lower gasoline prices as demand decreases and refiners plan to switch to the cheaper blended fuel used in winter. This September could be one of the softest demand months since last winter. Some analysts predict the demand to decrease by about one million barrels per day as a result of the end of the heavy-driving season, sated storage for heating oil, and an “anniversary effect” as consumers rein in spending for the weeks surrounding September 11. But rhetoric about an inevitable war against Iraq has raised crude oil prices close to $30.00 per barrel. Poor margins have caused some refiners to announce that they plan to cut production, a move that could cause some regional supply problems. Many analysts suspect that diesel prices will be the problem this September, particularly in mar-kets west of the Mississippi. Wholesale prices are already up more than 15 cents per gallon since the beginning of summer, while retail prices have only edged up slightly. A quick resolution to the Iraq situation could cause gasoline prices to flirt with some of the lows seen last winter. But if tensions persist without a foreseeable positive outcome, prices will likely edge higher, according to the WEXIndex report.

Originally posted on Fleet Financials