In shift, gasoline prices edge up
California’s streak of seven straight weeks of gasoline price declines has ended because of widespread refinery maintenance shutdowns that have reduced fuel supplies by nearly a third compared with a year ago.
In California, the average price of a gallon of regular gasoline was $4.213 a gallon, up 2.7 cents from a week earlier, according to the Energy Department’s weekly survey of service stations, released Monday.
The U.S. average continued to fall, dropping 4 cents to $3.790 a gallon, the Energy Department survey showed. The enduring strength of the national price decline was partly the result of the boom in oil supplies from North Dakota, which was helping reduce U.S. oil prices.
Until a few years ago, California had 14 refineries that produced the state’s expensive blend of gasoline, but now there are only 12, according to the state’s Energy Commission.
The two fuel refineries that closed, one in Bakersfield and one in the Los Angeles, are small. But their absence can have an outsized effect on gasoline prices because there is little supply cushion. Now, four of the remaining 12 refineries are shut temporarily, mostly for maintenance, according to state petroleum statistics.
As of April 27, that situation had left the state with about 4.46 million gallons of gasoline, compared with about 6.61 million gallons a year earlier, according to the California Energy Commission’s Weekly Fuels Watch Report. Among those closed for maintenance are Tesoro Corp.’s 166,000 barrel-a-day Golden Eagle refinery in Martinez, ConocoPhillips’ 139,000 barrel-a-day refinery in Wilmington, and Shell Oil Co.’s 156,000 barrel-a-day refinery in Martinez.
“Some hot spots may burn motorists before they see any more sizable relief in prices,” said Patrick DeHaan, senior petroleum analyst at GasBuddy.com, a website that tracks fuel prices. “When I mention hot spots, I’m thinking of the West Coast and California, where supply has dropped considerably, causing tightness and higher prices.”
DeHaan said the rest of the U.S. “should see short-term relief continue ahead of Memorial Day.”
In other energy news, crude oil prices dropped to their lowest level of the year. The U.S. benchmark grade of oil, West Texas Intermediate, fell $1.10 to $97.39 a barrel on the New York Mercantile Exchange after falling as low as $95.34 per barrel earlier in the day, the lowest since late December.
In London trading, Brent North Sea crude, used to price most U.S. oil imports, slipped 48 cents to $112.70.
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