Analysts Expect California Gasoline Prices to Stabilize Soon

Gasoline prices are expected to stabilize within the coming weeks as several refineries slowly go back to their full operations according to market analysts.

Ventura County’s benchmark gasoline blend, regular unleaded, was priced at $4.38 per gallon. That is a little higher compared to its most recent cost of $4.37 per gallon. However, it is lower by 17 cents compared to last week, said Southern California’s Automobile Club.

According to Denton Cinquegrana, Oil Price Information Service’s senior market editor for the West Coast, California was stricken with several of the highest price increases in the nation due to the on-going scheduled maintenance of some of the state’s refineries.

Gasoline prices in the West Coast have stayed high versus the other parts of the U.S. since the closing of Cherry Point Washington’s BP Refinery last February. However, gasoline prices are anticipated to fall since BP recently resumed its operation of 225,000 barrels daily, said analysts.

Cinquegrana said that with plenty of refineries resuming, the currently observed increase in retail prices will not continue. However, as refineries are coming back online, it will not be reflected in the inventory immediately, and may take a couple of weeks. He adds that they are hoping to spend less when the Memorial Day comes for as long as there are no more unplanned circumstances.

The two digit increase in the previous week are not related to the all time high of the state of $4.61 a gallon that was posted on the 19th of June, 2008.

Marie Montgomery, the spokeswoman of Southern California’s Automobile Club, said that it may take several weeks for gasoline prices to level off because there is plenty of available inventory purchased at a more expensive cost.

Montgomery said that people were panicking since they saw low inventory, and those purchasing at wholesale prices bought more than what they normally do during the past week which also increased the price. They purchased it at a more costly price and need to pass those higher costs through to meet their overhead.

Current crude oil prices recently fell to their lowest in six months, at $93.38, because of renewed worries that Greece will be pressured to abandon the common currency of Europe. Such an outcome, if it were to actually occur, would cause shockwaves all over the continent.

California has the third highest regular gasoline price in the whole country at $4.36 per gallon. Hawaii is on top of the list with a gasoline price of $4.54. The second is Alaska at $4.44.

South Carolina’s motorists spends the lowest for gasoline at $3.43 a gallon. It is followed by Missouri and Oklahoma at $3.45 and $3.46, respectively.

By: Chris Termeer

Chris Termeer

Chris Termeer is an oil and gas consultant, industry commentator and analyst. His book, Fundamentals of Investing in Oil and Gas provides a comprehensive overview of all aspects of the oil and gas industry, including exploration, drilling, production, storage, transportation and refining, to name but a few.

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