This Week in Petroleum:

Growing octane needs widen the price spread between premium and regular gasoline

In late 2016, the difference between U.S. average retail prices for premium and regular gasoline reached 50 cents per gallon. This price spread has been generally expanding since 2000, and the rate at which the spread has grown has accelerated over the past three years (Figure 1). Many factors on both the supply and demand sides are likely influencing this trend.

On the demand side, since 2013, the premium gasoline share of total motor gasoline sales has steadily increased, reaching a near 13-year high of 11.9% in August 2016. While lower gasoline prices may be supporting demand for premium gasoline, the upward trend in sales is more likely driven by changes in fuel requirements for light-duty vehicles in response to increasing fuel economy standards. To meet these standards, more car manufacturers are producing models with turbocharged engines that may require or recommend the use of high octane gasoline.

http://www.eia.gov/petroleum/weekly/

The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.