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Refiners, which have recently pocketed unprecedented profits in California, have seen an abrupt reversal of fortune. Crude oil's run to $100 a barrel a few weeks ago helped squeeze refiner margins to lows not seen since the industry doldrums of January 2003, Westfall said.
Tesoro announced last week that it had throttled back production at its two California refineries because of weak margins. Output from those plants would be reduced by up to 17% for the first three months of the year, the company said.
At least some of the state's extra gasoline supplies will be unusable in Southern California after March 1, when most of the state's gas stations must start selling a summer blend designed to keep emissions in check in warmer weather.
In addition, tankers full of California-grade gasoline are being sent to Asia and other destinations and diesel is being shipped to Chile -- all to shrink supplies, Lipow said.
For consumers, the outlook is expensive.
Most gas stations continue to sell gasoline for substantially more than $3 a gallon, and they have little incentive to lower prices. The profits they make now, one station owner said, will be needed later to offset losses.
And with refiners shutting down for maintenance and then switching to more expensive summer blends, prices are poised for a rebound.
"Prices are slowly coming down" for consumers, Lipow said.
But, he added, "it's a very short-lived phenomenon."
elizabeth.douglass
@latimes.com
Tesoro announced last week that it had throttled back production at its two California refineries because of weak margins. Output from those plants would be reduced by up to 17% for the first three months of the year, the company said.
At least some of the state's extra gasoline supplies will be unusable in Southern California after March 1, when most of the state's gas stations must start selling a summer blend designed to keep emissions in check in warmer weather.
In addition, tankers full of California-grade gasoline are being sent to Asia and other destinations and diesel is being shipped to Chile -- all to shrink supplies, Lipow said.
For consumers, the outlook is expensive.
Most gas stations continue to sell gasoline for substantially more than $3 a gallon, and they have little incentive to lower prices. The profits they make now, one station owner said, will be needed later to offset losses.
And with refiners shutting down for maintenance and then switching to more expensive summer blends, prices are poised for a rebound.
"Prices are slowly coming down" for consumers, Lipow said.
But, he added, "it's a very short-lived phenomenon."
elizabeth.douglass
@latimes.com
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