Gasoline prices fall slightly as refineries boost output

The average nationwide pump price for gasoline fell for only the second time in the last 17 weeks -- and, in California, continued a slow slide -- as refineries increased production, giving a much-needed boost to low fuel stocks.

But oil industry experts warned that the relief might be fleeting, noting that U.S. refinery production and the weather would be crucial in determining the direction of prices during the upcoming summer driving season.

The Atlantic hurricane season begins Friday, and scientists have predicted it will be worse than normal.

“I’m not convinced we are going to continue on this path” of lower prices, said Tom Kloza, chief oil analyst for Oil Price Information Service in Wall, N.J. “The most critical time to build stocks is the three weeks after Memorial Day. This weekend was just a dress rehearsal for the driving season that really starts four weeks later.”

After setting records for two weeks in a row, the average nationwide price for a gallon of self-serve regular fell 0.9 cent Monday to $3.209, according to the U.S. Energy Department’s weekly survey, as refineries that had been shut down for maintenance reopened. But the price was still 34.2 cents higher than a year earlier.

By another standard, just two states had average prices below $3 a gallon, compared with 22 states on May 12, according to AAA’s daily survey of gasoline stations Monday.

California’s average price fell 2.9 cents to $3.407, continuing a slow decline from a high of $3.461 on May 7 and just 14.1 cents higher than the year-earlier price.

But some Californians said they hadn’t seen any relief as prices in the state ran as high as $3.79 at gas stations in Crescent City and Goleta.

James Richards, a 58-year-old blues guitarist who lives near Yosemite National Park and drives as much as 200 miles a week to perform with his band, said prices had gone up a quarter over the last month to $3.47 a gallon near his home in Sonora.

“The excuses the refineries provide are not logical at all. It’s because of maintenance? Get real, everyone has maintenance. The city bus fleets have maintenance. They aren’t raising fares every week,” said Richards who drives a four-cylinder Toyota Camry.

“My salary is going to the gasoline companies,” he said. “We are struggling musicians trying to pay bills and make ends meet and these big corporations are strangling us.”

In New York futures trading, oil for July delivery fell $2.05 to $63.15 a barrel as risks of more violence in major oil producer Nigeria seemed to ease and after the U.S. began formal talks with Iran, a major oil producer.

Phil Flynn, vice president and senior market analyst for Alaron Trading Corp. in Chicago, said: “All the oil traders came back today and the world seemed like a safer place.”

ron.white@latimes.com