Gasoline Prices: Cyclical Trends and Market Developments
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Hoglund, Lori E.
Gasoline prices experience volatility often credited to fluctuations in the crude oil market, but gasoline is subject to its own supply and demand pressures. Cyclical trends such as seasonal changes in refining costs, production adjustments, and changes in demand contribute to gasoline price movements over a typical year. Recently, however, market developments not influenced by seasonal fluctuations have affected prices. From 2010 to 2014, increased access to cost-advantaged domestic sources of crude oil has expanded domestic gasoline production, and evolving consumption patterns in the United States and abroad have altered both import and export demand. Between January 2005 and September 2008, the producer price index for gasoline trended generally higher. (See chart 1.) The onset of the Great Recession pressured producer prices lower in the fourth quarter of 2008, a 67.8-percent drop, before prices started to rebound in early 2009. By mid-2011, prices reached prerecession levels and remained in a tight range before dropping more than 50 percent in the latter half of 2014 and early 2015. This Beyond the Numbers article examines the many factors that contributed to shifting producer gasoline prices from 2005 through 2014.
gasoline prices; inflation; Consumer Price Index; CPI