February WEX Fuel Index

Retail gasoline prices are averaging $1.74 per gallon nationally, a decrease of 17 cents per gallon from last month and a whopping 64 cents per gallon below last year. However, fleet managers should not get too comfortable with low prices as most analysts predict a slow, but steady uptick in prices.

While it’s not uncommon for late February and early March to see prices spike, this year wholesale prices are likely to jump a bit later in the year.

Gasoline inventories are very strong and while there is no way to tell if the product currently in storage is winter grade or summer grade gasoline, analysts believe that there is more summer fuel in storage than might normally be at this time of year. If that is true, that would bode well for smaller increases.

Summer gas is required by the EPA and is more expensive and more difficult to make. Retailers cannot sell winter gasoline after June 1st in most of the country, but most wholesalers stop delivering winter gasoline in April and May.

Wholesale prices remain relatively weak, even with planned maintenance at refineries in the Midwest. But despite the current environment market-watchers believe prices will eventually rise as traders fear that supplies will not be able to sustain the increased demand in the summer. That fear always pushes prices higher.

Crude oil prices for the time being appear to be range bound between $30-35 per barrel and experts don’t expect higher prices than that until at least the second half of the year. The low crude prices will keep downward pressure on prices.

Meanwhile, diesel on the street averages $1.97 per gallon and while it is still priced above gasoline, expectations are for diesel to drop below gasoline in the late 2nd, early 3rd quarter.