“For the fourth day in a row, California gas prices have climbed to an all-time high, sending prices higher along the entire West Coast. But there are signs that the hikes may be slowing down. The statewide average for California is $4.67 a gallon, up just three-tenths of a cent overnight. That’s 49 cents higher than a week ago and nearly 87 cents higher than a year ago. The national average adds three-and-one-half cents to $3.82 and has been the highest on record for the calendar day for seven straight weeks. Oregon’s statewide average jumps eight cents to $4.08 and is also the highest ever for this time of year.” AAA Oregon/Idaho Public Affairs Director Marie Dodds says, “After 64 weeks, California bumps Hawaii as the state with the most expensive gas in the country. The skyrocketing prices are blamed on refinery problems and an oil pipeline issue. The situation is still volatile, but AAA expects prices will begin to decrease this week.”
The Exxon Mobile refinery in Torrance lost power on October 1 and didn’t start operating again until October 5. And a fire closed a major Chevron facility in early August in Richmond. The wholesale price of gasoline reached an all-time high last Thursday as fuel buyers worried about supply. Many gas stations closed when they ran out of fuel because they didn’t want to buy gasoline at such high prices and then be stuck selling the fuel at a loss after prices came back down.
From Monday, Oct. 1 to Monday, Oct. 8, California’s average gasoline price jumped a record 50 cents in one week to $4.67 a gallon. This is nearly double the next largest one-week increase in California history, which was 26 cents in late February of this year. At that time national gasoline prices were surging due to higher oil prices caused by escalating geopolitical tensions with Iran and positive news surrounding European sovereign debt concerns. Following Hurricane Katrina in 2005, a number of states east of the Rockies saw prices move even higher in one week than the recent 50-cent increase in California.
Sunday, California governor Jerry Brown asked the state’s Air Resources Board to allow refineries to make the cheaper and less environmentally friendly winter-blends of fuel. Normally, California refineries are not allowed to produce these blends until Oct. 31. The summer blends evaporate more slowly in warm weather.
California U.S. Senators Dianne Feinstein and Barbara Boxer are urging investigations into why prices soared so quickly. Similar probes have been done many times before and have turned up little or no evidence that spikes could be blamed on market manipulation. There are relatively few refineries that produce California’s gasoline, and disruptions in production or distribution can dramatically impact prices. And because California’s gasoline must meet strict environmental standards, fuel can’t be provided from other sources.
While the national average is up slightly, and drivers on the West Coast have seen gas prices rise in the last week, drivers in 32 states plus Washington D.C. are paying less for gas this week. One reason for the decrease is falling crude oil prices.
After briefly falling below $90 per barrel in late September, West Texas Intermediate (WTI) oil prices settled below this threshold to end last week and continued to move lower to start this week, settling at $89.33 Monday. Today crude is trading around $92, same as a week ago. Crude prices are down about four percent in the last month. These declines have been keyed by continued bearish economic news overseas. As global economies grow less than expected, they demand less crude oil than anticipated. This puts downward pressure on global oil prices.
Drivers in all states and the District of Columbia continue to pay more than $3 per gallon at the pump; and seven states have an average price at or above $4 a gallon, same as last week. After 64 weeks, California bumps Hawaii as the state with the most expensive gas in the country. Washington and Oregon remain in the top ten most expensive states. California is most expensive at $4.67 (up 49 cents and up from second last week), followed by Hawaii at 4.41, Alaska at $4.18, New York at $4.13 and Connecticut at $4.12. Washington is sixth for the fifth week in a row at $4.10 (up seven cents). Oregon is seventh for the second consecutive week at $4.08 (up eight cents). Idaho is 20th up from 23rd last week at $3.84 (down a penny). For the second week in a row, South Carolina has the cheapest gas in the nation at $3.49 a gallon (down a penny).
Diesel prices are holding fairly steady. The national average gains two cents to $4.10 while Oregon’s average remains at $4.28. Diesel is at or above $4 a gallon in 40 states (including the District of Columbia), same as last week. Hawaii is most expensive at $4.95, followed by California at $4.52 (up seven cents), Alaska at $4.37, Connecticut at $4.36, and New York at $4.35. Washington is seventh for the second consecutive week at $4.32 (same as last week). Oregon is ninth down from eighth last week. A year ago, the national average for diesel was $3.80 and Oregon’s was $3.99.