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US Fuel Retailers See Margins Rebound as Gasoline Demand Improves, RBC says

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US fuel retailers saw a partial recovery in gasoline margins last week as pump prices rose faster than wholesale fuel costs, while demand showed early signs of improvement, RBC Capital Markets strategists said in a note on Friday.

RBC analysts said estimated average US retail fuel margin expanded by about $0.06 per gallon in the week ended July 30, reversing some of the previous week's decline. Retail gasoline prices increased by about $0.13/gal over the week, outpacing a $0.07 rise in wholesale prices.

However, despite the weekly improvement, longer-term profitability remained stable, with 12-month and 12-week moving averages for fuel margins holding in the low- and mid-40 cents-per-gallon range, respectively.

The margin recovery comes as fuel retailers navigate continued crude oil volatility linked to geopolitical tensions, including uncertainty surrounding the Iran conflict, which has raised concerns over the sustainability of fuel margins heading into H2 2026.

Meanwhile, US gasoline demand also showed modest improvement. The Energy Information Administration said gasoline supplied, a proxy for consumption, rose 1.1% over the week for the period ending July 24, following a 1.2% increase in the previous week.

RBC analysts said investor attention during upcoming Q2 earnings calls for convenience store operators is likely to focus on consumer demand trends, fuel margin durability, and companies' ability to execute growth strategies through 2026 and beyond.

Meanwhile, consolidation remains a key theme in the sector. Couche-Tard announced plans to acquire all outstanding shares of Poland's Zabka through a voluntary tender offer, expanding its footprint in one of Europe's largest convenience retail markets.

The acquisition is projected to strengthen Couche-Tard's international growth strategy as global convenience retailers seek scale, diversify revenue streams and build resilience against volatile fuel markets.

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