Gasoline prices around the state shrugged off two refinery fires Friday to fall for the second straight week, a federal report showed Monday. Analysts predicted that more price breaks were on the way.
The average price of a gallon of regular gasoline in California fell 4.2 cents during the last week to $3.098, which was 57.2 cents below the same week a year earlier, according to the Energy Department’s weekly survey of filling stations.
That was despite a lack of fresh news regarding the status of Tesoro Corp.'s Wilmington refinery, where a fire burned for three hours Friday and left the facility running short of its 97,000-barrel-a-day full production level. Tesoro officials were still assessing the damage Monday. A second, smaller fire occurred at a Chevron Corp. refinery in the Bay Area.
In the spot fuel market, the price for Carbob, or California Reformulated Gasoline Blendstock for Oxygenate Blending, traded between $1.89 and $1.90 a gallon Monday after surging Friday to $2.04 a gallon. Part of the reason for the price decline, analysts said, was that refinery production in the state had been rising in September and climbed ahead of 2008 levels for the first time in several weeks.
During the week that ended Sept. 18, California refineries made more than 6.7 million barrels of gasoline, an increase of about 1.6% from the 6.6 million barrels they made a year earlier, according to the California Energy Commission’s Weekly Fuels Watch Report. The 6.7 million barrels represent a 4.4% increase over the previous week. The refineries also drew down their crude oil supplies by 7.9% during the same week.
“Cooler heads prevailed on Monday,” Tom Kloza, chief oil analyst for the Oil Price Information Service, said about the state’s wholesale fuel markets. He expects to see “decreases to an average of $2.75 a gallon around the state as gasoline supplies increase.” Kloza said motorists typically travel less during the weeks after the summer driving season.
Los Angeles was still one of the most expensive places in the nation for gasoline. Among the 10 major cities tracked by the Energy Department’s Energy Information Administration, only San Francisco’s average of $3.13 a gallon was higher than Los Angeles’ $3.10 a gallon. Houston had the cheapest at $2.229 a gallon.
The U.S. average fell 5.3 cents to $2.499 a gallon, $1.133 lower than a year earlier.
Talk of relief at the pump came as oil was driven higher by an improving stock market and concerns over Iran’s missile tests. Crude oil futures for November delivery rose 82 cents, or 1.2%, to $66.84 a barrel Monday on the New York Mercantile Exchange.
Analysts weren’t expecting much pressure on gasoline prices from crude oil, despite Iran’s testing of missiles that Tehran says are capable of striking targets in Israel. Short of an attack on Iran to destroy its nuclear program, the glut in world oil supplies wouldn’t be affected, analysts said.
“The markets already know that Iran will always be a trouble spot,” said Fadel Gheit, senior energy analyst for Oppenheimer and Co. in New York.
Phil Flynn, senior market analyst at PFG Best Research in Chicago, said, “The world doesn’t need Iran’s oil right now.”