SOUTH PORTLAND, ME - In the latest fuel report from Wright Express (WEX), the company said oil prices spiked higher in the first two trading sessions of 2012, as investment money combined with issues in the Persian Gulf spooked traders. WTI crude hit nine month highs around $103 per barrel and Brent briefly traded for $114 per barrel.
Gasoline, however, was a reluctant participant. If gas matched crude, wholesale prices would have marched more than 15 cents a gallon higher. Instead, there were uneven increases across the country. California wholesale prices actually backed off to about $2.80 per gallon thanks to a report of imminent imports.
Group 3 gasoline sold for at a discount of 21 cents to futures, putting wholesale prices in some Plains’ states in the low $2.50s. Northeastern wholesale numbers climbed to $2.75 per gallon and higher thanks to the ills of some European refiners.
Diesel raced 12-18 cents a gallon higher thanks to the loss of some European production and robust exports. Wholesale diesel cost well above $3 per gallon in nearly every portion of the country and retail has yet to catch up with the wholesale move.
Fourth quarter 2011 petroleum demand was anemic. The Department of Energy numbers show total demand of just 18.02 million barrels per day, the second lowest figure of 2011. Four-week average levels are more than 1.4 million barrels per day behind same period last year and gasoline demand in that term is off 4.9% from 2010.
For fleet managers, expect to see gasoline prices at the pump to creep up over the next few weeks, but nothing too significant. Experts don’t expect the spring run up to begin until late February, but many are calling for new records to be set between April 1 and May 5.
Diesel prices on the street should see a more notable increase to match wholesale moves.