Sept. 12, 2011 — Retail gasoline prices have dropped by more than 25 cents per gallon over the past month, but some experts are suggesting that prices have likely hit bottom. Wholesale prices have seen dramatic increases in the past couple of days.

Last week began with wholesale gasoline prices at $2.50-$2.70 per gallon, but it ended with some markets back above $3.00 per gallon. Crude oil wasn’t nearly as volatile as gas; it fell to a new 2011 low but then bounced back to $82.60 per barrel.

Every U.S. wholesale spot market, where refiners trade large cargoes of gasoline, traded for well over NYMEX futures’ quotes. The wildest areas were on the coasts. Refinery work in the Pacific Northwest sent wholesale prices in that market to $3.16 per gallon and California topped $3.05 per gallon. East Coast wholesale prices moved back above $2.80 per gallon after 72 hours below $2.60 per gallon.

Midwestern wholesale prices are cheaper than elsewhere, with Chicago gas trading just above $2.68 per gallon. Several Midwestern states saw retail quotes of less than $3.00 per gallon, but those numbers were below cost and are expected to increase.

U.S. gasoline imports were tallied at just 505,000 barrels per day last week, according to the Department of Energy. That is the single lightest week of foreign contributions to U.S. gasoline supply since late 2001. Combined with the shutdown of ConocoPhillips’ 180,000 barrels per day Trainer, PA refinery, the data suggests a tight supply picture for east coast gas. Refinery downtime on the West Coast could also underpin markets there in late October.

West Coast runs are currently about 283,000 barrels per day higher than last year, but fairly ambitious refinery work begins this month. West Coast gasoline stocks are 2.8 million barrels below compared to the same time last year, so there is little margin for error.

East Coast gasoline stocks dropped by one million barrels last week. Runs are about 200,000 barrels per day higher than last year, but the loss of Trainer and routine fall maintenance could keep stocks of motor fuel tight.

With a bleak supply situation and rising wholesale prices, drivers could expect to see a bounce in retail prices over the coming weeks. Many experts believe that despite the economic woes and reduced demand, fuel prices will remain strong for the remainder of the year.

WEXIndex Retail Fuel Price Index is a monthly publication produced by Wright Express with market insights provided by OPIS Energy Group.