Gasoline Prices Drift Lower on Seasonal Demand Slump

Seasonal Weakness

Gasoline prices have continued their seasonal descent, trading below $2.00 per gallon at the wholesale level. This trend is typical for the winter months when driving activity decreases significantly. The 'driving season' premium has completely evaporated, and refineries have switched to producing winter-blend gasoline, which is generally cheaper to manufacture than the summer-grade variety.

Refining Margins

Crack spreads—the difference between the price of crude oil and refined products—have narrowed, putting pressure on refining margins. With crude oil prices relatively stable, the weakness in gasoline is driven primarily by the demand side. Inventory data shows a gradual build-up of gasoline stocks, further confirming that supply is currently outstripping consumption.

Consumer Impact

For consumers, this translates to relief at the pump, with retail prices dropping in tandem with wholesale futures. However, analysts warn that this downtrend may be limited. If crude oil prices were to spike due to geopolitical events, gasoline would quickly follow suit. For now, the market remains in a bearish consolidation phase, waiting for the spring turnaround or unexpected refinery outages to change the direction.