Gasoline costs ease in California, nation
Retail gasoline prices fell again in California and around the nation during the last week, a federal survey showed Monday, as imports grew and refineries avoided problems and ramped up production.
The decline was strong enough to convince some analysts that slow relief at the pump could continue until August, barring major new problems.
The price of a gallon of self-serve regular gasoline in California dropped 3.3 cents to $3.374, according to the Energy Department’s weekly survey of filling stations. That was 10.5 cents above the year-earlier price. Nationally, prices eased 5.2 cents to $3.157, which was 26.5 cents ahead of the same week in 2006.
Growing U.S. imports helped lower prices, the Energy Department said. In addition, the nation’s refineries were able to push utilization rates back above 90% after spending weeks below that standard because of accidents and maintenance-related shutdowns, said John Kilduff, vice president of risk management at Man Financial Inc. in New York.
“My feeling is prices have likely peaked already. We should see prices continue to fall, but we are going to need to be a little bit lucky. The refineries will have to keep it up,” Kilduff said.
But the optimism was tempered by a very thin margin for error. In spite of recent gains, gasoline supplies remain well below 2006 levels. One expert said the U.S. was beginning the 2007 hurricane season with “the lowest amount of gasoline per capita in the modern era.”
In May 1982, the nation had 214.2 million barrels of gasoline in storage and was burning less than 6.8 million barrels a day, about a 32-day supply, said Tom Kloza, chief oil analyst for the Oil Price Information Service in New Jersey.
Last week, with demand running at 9.4 million barrels a day, the 196.7 million barrels reported in storage represented less than a 21-day supply.
“In laymen’s terms, we are up the proverbial creek without a paddle if there are any major refinery problems. There is no safety net for any sort of problem,” Kloza said.
In New York futures trading, crude oil for July delivery was up $1.13 to $66.21 a barrel.
