California gasoline prices set to drop from record highs
SAN FRANCISCO/HOUSTON (Reuters) - Average California retail gasoline prices have scaled yet another record high, an auto organization said on Monday, while analysts said wholesale markets signaled consumers may see a dramatic drop in pump prices within a week.
The average California pump price rose by just over a penny from a day before to $4.668 per gallon for regular gasoline, and were up 50 cents from just a week before, according to the American Automobile Association website on Monday morning.
The spike in prices has been so jarring for the state, the largest gasoline market in the United States, that it prompted one U.S. senator to call for a federal investigation.
But wholesale gasoline in the Los Angeles spot market fell 60 cents a gallon on Monday, one day after California Governor Jerry Brown authorized the sale of winter-blend gasoline more than three weeks early.
"Retail prices will come down as hard as they went up," said David Hackett, president of Stillwater Associates, an energy consultancy in Irvine, California. "It went up 56 cents in a week, it will come down that fast."
A string of local refinery troubles has constrained supply in the state, which is not linked to national pipeline and refinery networks. The return of Exxon Mobil Corp's 149,500 barrel-per-day Los Angeles area refinery on Friday, after an October 1 power outage, also helped to bring prices down.
That shutdown fell against the backdrop of lower output from Chevron Corp's 245,000-bpd plant in Richmond, California, which has had its key crude refining unit shut down for two months because of an August 6 fire.
Southern California bore the brunt of the supply disruptions last week and faced the highest prices in the state, with $5 per gallon spotted in some areas.
Senator Dianne Feinstein, in her call on Sunday for an investigation by the Federal Trade Commission, pointed out that California commuters already pay the highest gasoline prices in the country, while also going through the longest commutes.
The U.S. national average price for regular gasoline was $3.818, AAA said on Monday.