US gasoline to stay stable despite winter-blend change – analyst

17 September 2012 17:59  [Source: ICIS news]

HOUSTON (ICIS)--US gasoline Reid Vapor Pressure (RVP) standards have switched to cheaper winter blends, but this may not be enough to bring down retail gasoline prices, an analyst said on Monday.

On 15 September, gasoline changed from the pricier summertime 7.8 RVP blends to the heavier winter-grades at 11.5 RVP and higher, which are cheaper for refineries to produce.

The US Environmental Protection Agency (EPA) regulations require gasoline to have a maximum RVP of 7.8 lb/square inch during the high-ozone season of 1 June through 15 September. These are the maximum standards for everyone covered by the regulations, including retailers and wholesale purchaser-consumers.

As the busier summer driving season ends, refiners are able to produce heavier, cheaper gasoline since there will be fewer cars on the road.

Accordingly, the higher RVPs typically signals lower gasoline prices.

However, according to Patrick DeHaan, analyst with, the magnitude of the drop in gasoline prices might be diminished by the third round of economic stimulus recently announced by the Federal Reserve.

“I think gas prices will remain high for several weeks,” he said. “I believe that for a majority of the rest of the year, the national average would be in the mid-$3/gal range or higher.”

On Monday, US automobile organisation, AAA, said the average price of regular retail gasoline was $3.862/gal, up from $3.601/gal during the same time last year.

Current average price

Week ago average

Month ago average

Year ago average





(Source: AAA’s national average price for regular retail gasoline.)

($1 = €0.76)

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By: Anna Matherne

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