California gasoline average hits $3.25
California drivers dug a little deeper at the pump last week, but some analysts predicted Monday that the surge in gasoline prices since the beginning of the year might be on the wane.
The price of a gallon of self-serve regular gasoline in the state rose 2.4 cents to $3.252, according to the Energy Department’s weekly survey of filling stations around the nation. That was 44.1 cents higher than a year earlier and 64.2 cents higher than the $2.61 state average at the beginning of the year. The national average was $2.802.
“The West Coast has had more refinery work than the rest of the country,” said Tom Kloza, chief oil analyst for the Oil Price Information Service in Wall, N.J. “The good news here is that most of them should be working again in pretty decent order in the next couple of weeks.”
Kloza said California wholesale gas prices had fallen 20 cents from their 2007 high of $2.59 a gallon March 28, a decline that should be reflected at the pump fairly soon.
Although relief may be on its way, Californians filling up Monday still felt the pinch. A second survey, by AAA, showed that motorists in the state paid an average of $3.285 on Monday for a gallon of self-serve regular. That was nearly 26 cents higher than the next-most-expensive state in the auto association’s survey.
The refining pinch was felt throughout the region, as Washington ($3.026), Nevada ($3.010), Hawaii ($3.009) and Oregon ($3.002) also had average prices of more than $3.
Kloza said it would take a major supply disruption to drive prices higher.
But he cautioned that California would remain more vulnerable to sudden price fluctuations for years to come because refinery capacity barely met demand even under the best of circumstances.
At least one segment of the public shows that driving demand remains strong.
A national survey of 2,518 owners of recreational vehicles, travel trailers, motorcycles and boats conducted by Ohio-based Nationwide Mutual Insurance Co. found that nearly 70% said high fuel prices would not change their rolling vacation plans. Two-wheelers in the survey, to be published today, said prices would have to reach $6.27 a gallon before they would stop driving.
Elsewhere in energy markets Monday, crude oil futures for May delivery fell $2.77, or 4.3%, to $61.51 in New York. Analysts attributed the drop to healthy inventories of oil and the diminishing of Persian Gulf tensions with Iran’s release of 15 British sailors and marines.
The market apparently dismissed Iranian President Mahmoud Ahmadinejad’s announcement Monday that his country had succeeded in reaching industrial-scale production of nuclear fuel, said Fadel Gheit, senior energy analyst at Oppenheimer & Co. in New York.
The Iranian economy “is in shambles,” Gheit said. “Inflation is high. Unemployment is high. The nuclear thing is a facade, to help people forget their miseries at home. It’s a diversion.”
