Gasoline price ticks down again after rising all week, may be stabilizing, but may continue to slide

The retail price of gasoline may be settling into a relatively stable range, ticking down yesterday after rising all week, but it may continue to slide unless crude oil recovers.

The AAA Daily Fuel Gauge Report national average retail price for a gallon of regular unleaded gasoline declined to $1.671 from $1.673. The trough price last week was $1.660. Compared to the massive declines of the past five months, this is relative stability.

January RBOB unleaded gasoline futures are at $0.9693, indicating that retail prices are headed for $1.56 to $1.61 within a few weeks, about 8 cents below the current price level. Actually, wholesale and retail prices are reasonable closely balanced, so there is no inherent trend other than what happens with retail demand or wholesale prices.

The open question is whether the current glut of crude oil continues, gets worse, or gets better, especially if OPEC does manage to engineer some form of reduction in output. There are simply too many question marks to reliably guess the trend. My suspicion is that there is still room for more decline since there are still too many people who are go-go for speculating in energy for the long term, even in the face of a worsening recession in the near term.

-- Jack Krupansky