OPIS Headlines

January 20, 2015
OPIS Survey: Strong Move Higher Seen for Weekly Volumes

An exclusive OPIS survey of close to 5,000 stations nationwide reveals that weekly gasoline volumes were sharply higher compared to the week prior. While the week-to-week volumes look strong, current sales lag the week prior.

For the week ending Jan. 10, the nearly 5,000 stations in the survey reported an average increase in store volumes of 5.8%. Of the stations participating in the survey, the average volume was up at nearly 75% of the stations. Of the stations reporting higher volumes, more than 61% of them said that volumes were higher by 5% or more.

The EIA, on the other hand, reported a more modest week-to-week increase of 0.8%. Some of the demand surge was attributed to continued soft retail gasoline prices and more modest weather after a week of frigid temperatures.

While the weekly increase looks impressive, retail sales volumes trail last month by 4.3%. Of the stations in the survey, 69.5% reported a decline in volumes. At the same time, compared to a year ago gasoline volumes are slightly higher, with an average volume increase of 0.8%. For a year-on-year comparison, the EIA reports a huge 10.7% increase.

The rolling four-week average, according to the OPIS survey, is very flat to last year at 0.1%.

For more information on volume analysis by state, please contact Brian Norris at 301-287-2413 or via e-mail at bnorris@opisnet.com.

January 12, 2015
OPIS Survey: Gasoline Demand Slides During Christmas Week

An exclusive OPIS survey of roughly 5,000 retail outlets nationwide reveals that gasoline volumes were trickling lower after a sharp drop the week prior.

For the week ending Jan. 3, gasoline sales were seen declining on average 0.19%. The decline in gasoline volumes was on the heels of a sharp drop seen the week before. Traditionally, January is a tough month for gasoline demand as just over 56% of the stations in the survey said volumes were down.

Compared to a month ago, gasoline volumes were off by just under 10%, with 81% of the participants in the survey saying that gasoline sales were down. Drilling deeper, almost 60% of the stations in the survey reported a decline of 10% or more. Versus a year ago, average star volumes were down by 0.82%  with roughly 58% of the stations in the survey reporting a decline in volumes.

Last week's EIA statistics showed a much larger weekly decline of 8.4% in gasoline demand compared to the week prior. But compared to a year ago, gasoline demand was up 6.5% by the EIA's metrics.

For more details on volume analysis by state, please contact Brian Norris at 301-287-2413 or bnorris@opisnet.com.

January 7, 2015
OPIS Survey: Gasoline Demand Slides During Christmas Week

An exclusive survey of roughly 5,000 retail stations nationwide reveals that gasoline demand was slumping from the week prior to the Christmas holiday.

For the week ending Dec. 27, the OPIS survey revealed a sharp decline in gasoline volumes sold. From the week prior, gasoline demand was down by an average of 11.3% for the week ending just after Christmas. Of the retail outlets participating, an eye-catching 86.1% of the stations reported a week-to-week decline in gasoline sales.

Monthly comparisons show a decline as well. However, the most recent week compares to the high-travel Thanksgiving week and shows a 5% decline compared to a month ago. Almost 70% of the stations in the survey said that gasoline volumes were down versus one month ago. A nominal decline was seen when compared to a year ago, with average volumes off a slim 0.3%., with just over 55% reporting a decline in sales.

The OPIS survey of actual gallons sold continues to suggest that the EIA is overestimating demand. The EIA reported a 1% increase in gasoline demand week on week, while compared to a year ago, gasoline demand is running 8.1% higher.

For more details and volume analysis by state please contact Brian Norris at 301-287-2413, or bnorris@opisnet.com

December 30, 2014
OPIS Demand Survey: Gasoline Consumption Surge Continues

An exclusive survey of actual retail sales by OPIS reveals that gasoline demand continued to climb last week, rising by 2.2% from the previous week. However, the OPIS survey of nearly 5,000 stations finds that volumes showed some attrition when compared to the same period in 2013, easing by about 0.5%.

As has been the case through recent months, the OPIS survey suggests that the Energy Information Administration is overestimating motor fuel demand. EIA data for the week ending December 19 showed a 1.6% weekly climb in implied demand, reflecting numbers that were up a robust 3.7% from last year.

Individual station profiles reveal that some 56.7% of sites saw volume decreases versus the same period in 2013, with 30.4% of stations reporting drops of more than 10%.

Some of that decline can be attributed to very aggressive price offers from Big Box retailers. When compared to November data, the most recent survey finds 52.1% of stations reporting higher gasoline sales. Just over 57.7% of surveyed sites sold more gasoline on a weekly basis than in the prior week.

On a year-to-date basis, OPIS data suggests that typical sites have seen volume losses, of just over 2%. DOE weekly data for the same period shows a rise of just under 1%.

Note: for more details on the exclusive OPIS Volume report, or to participate in the anonymous data survey, call Brian Norris at 301-287-2413, or email bnorris@opisnet.com.

December 29, 2014
The Look Ahead: Some Expectations for Futures Trading this Week

The final trading days of 2014 are here, and while volumes are expected to be light this week, with New Year's Day sandwiched in there, prices are looking similar to 2008-2009, when the market was in the midst of a financial calamity.

Last week, January RBOB dropped below the $1.50 level, and while it did not settle below it, the last time RBOB settled below $1.50 was in early May of 2009. Last week also saw some multi-year lows as Brent closed at $59.45/bbl on Friday, the lowest also since May of 2009. Though all the outer-month contracts are below the $1.90 level, ULSD dropped briefly below the $1.90 mark, and it was the first time since May 2010 that the front-month contract slipped below $1.90.

January refined products expire on Wednesday, but the February contract has already been collecting much of the trading attention for about a week now.

Last week saw losses on both Christmas Eve and Boxing Day pull ULSD futures down more than 8cts, WTI close to $2.50 and RBOB a little more than 6cts.

Cash markets were also under pressure last week, with the New York Harbor the only market East of the Rockies posting prices above the $1.50 level. All the other East of the Rockies markets see gasoline prices in the $1.20s, while CARBOB is either side of $1.40/gal.

This week will see California suppliers have to comply with the cap-and-trade program in the state that seeks to reduce greenhouse gas emissions. Based on the price of allowances, expectations are for prices to go up by about 12cts on Thursday.

Other elements to watch:
--At the end of the week, some fresh investment money may start to trickle into the market from the likes of index funds and pension funds among others. The inflow of funds may take a couple of days and should support the market but may ultimately end up being a head fake.

--If history is any indication, inventories of crude oil and refined products should see some sizable draws as terminal managers try to avoid year-end tax implications. Both gasoline and crude oil last week were at a record high, according to EIA data, for the week leading up to Christmas. Additionally, gasoline demand was abnormally high.

--A light week is also anticipated for not just the paper markets, but the physical markets as well, with many supply staff and traders taking a break for the holidays. Additionally, few will be willing to take on additional risk with just a few days left in the year.

--The most common price on the street for a gallon of regular gasoline stood at $1.99, according to OPIS data. For 2014, retail prices are likely to average $3.34/gal, about 15cts cheaper than 2013. Although prices are likely to remain low this coming winter, Pennsylvania and Massachusetts will see a tax bump, and the cost to comply with the California cap-and-trade program will boost retail prices.

--Ethanol has dropped off severely, but prices seemed to have leveled off for now. RIN values remain north of 70cts, which can help spur some discretionary blending, though there are always many moving parts.

Become a better fuel buyer without ever leaving your desk –sign up now for the OPIS Basics of Fuel Buying eLearning course. Taught by 30+ year industry veteran Scott Berhang, this 11-module online training program will guide you through everything you need to know about purchasing physical fuel. Visit www.opisnet.com/events/fuel-buying-online.aspx or call our eLearning team toll-free at 888-301-2645 for more details and to get started.

December 19, 2014
Retail Diesel Margins Keep on Trucking; Some States Flirt with $1 gal Rack-to-Retail

It is wonderful to be a truck stop operator these days or to have a brisk diesel business at a c-store.

Most recent OPIS data, featured in this week’s Retail Fuel Watch publication, shows rack-to-retail margins averaged 78.8cts gal in the seven day period ending December 15. That is the highest gross margin ever recorded, and puts gross profit margins for diesel fuel at a robust 23% of sales value.

Many individual states show even more stunning returns for c-stores or truck stops that retail diesel fuel. Colorado diesel sells at an average 98.7cts gal over average wholesale costs, at least for those that pay street prices. Also topping 90cts gal are Iowa, Minnesota, Nebraska, Ohio, South Dakota, Utah, and Wisconsin.

However, all of these states pale when one looks at North Dakota diesel margins, an area with very high demand thanks to the need to power trucks and support equipment in the Bakken Shale.  The difference between the wholesale cost (plus taxes) and retail price in the state is a whopping $1.221 gal.  The margin comes thanks to an 82.2cts gal drop in wholesale costs, and a much more modest 18.7cts gal dip in street prices.

There isn’t anything remotely resembling a misery index among diesel retailers these days.  The thinnest retail margins show up in Alaska (34.7cts gal); Delaware (45.9cts gal); and Pennsylvania (53.5cts gal).  In all, only six states sport rack-to-retail spreads of less than 60cts gal.

Within the states, there are a number of markets where diesel fetches margins of over $1 gal on the street. The Fargo area of North Dakota tops the list, with average margins of $1.199 gal with Bismarck just behind at $1.178 gal. San Francisco retailers can count on diesel margins of about $1.12 gal and Washington D.C. finds a $1.10 gal return on the street. A number of Colorado metropolitan areas also top $1 gal in margin, as do markets such as Rochester, MN; Madison, WI; and Sioux Falls, SD.

Of course, much of the truck stop business finds larger fleets that do not pay retail prices. Instead, many of the larger or medium sized haulers buy fuel on a “Cost-Plus” basis with prices tied to OPIS rack averages plus or minus a negotiated differential. In those cases, fleet purchasers may be purchasing fuel commonly at 50cts gal or more below posted street prices.

Helping to offset some of the lower returns on cost-plus sales to fleets, however, are extensive rack discounts across the country. OPIS has observed common rack discounts of 5-20cts gal from coast to coast, with some of the largest wholesale discounts taking place in Florida, Texas, and the Carolinas.

Footnote:  Gasoline margins are substantially thinner than diesel, but the last month of 2014 continues to provide some of the widest profits in a generation. The week ending December 15 saw average gross margins of 38.1cts gal, up from a robust 33.6cts gal in the prior period. The current 30 day rolling average for motor fuel margins is just above 30cts gal, compared with 18cts gal in the same time frame one year ago.

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