Tight Markets Lead to High Gasoline Spreads

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• Low crude oil and product stocks tend to mean high crude oil and product prices

• Low gasoline stocks in the spring and summer increase the price of gasoline relative to crude oil. The difference between gasoline spot prices and crude oil spot prices are shown as the green band in the graph.
  • During May, this gasoline price spread is typically about 12 cents per gallon
  • In May 1999, the gasoline price spread averaged 6 cents per gallon.
  • In May and June 2000, it averaged about 20 cents per gallon, similar to the spreads seen during late summer 1997, when we had a gasoline price runup as demand outstripped capacity for a time.

• Accompanying low stocks and high gasoline spreads is the increased potential for price volatility.