Jan. 29--Get ready to pay a few more bucks for gas.
Prices are again on an upward march in California -- and could hit $3.80
to $3.95 a gallon by Valentine's Day -- as refineries across the state convert
to the more expensive summer blend of fuel while coping with sporadic outages.
The statewide average stood at $3.68 Monday, and that was up 12 cents
from a month ago, according to AAA. By the end of this week, that figure
should be several cents higher.
"It looks bleak," said Senior Petroleum Analyst Patrick DeHaan of
GasBuddy.com. "Spot prices continue to jump and could rise another 10 to 25
cents a gallon over the next week or two."
Petroleum Industry Analyst Bob van der Valk noted Monday that gas in Los
Angeles had gone up 15 cents a gallon and gas in the Bay Area had gone up six
cents overnight.
The increases are related to the state's annual switch from winter to
summer gas, a blend of fuel used from April to Oct. 31. To prepare for the
switch, refineries start drawing down supplies now and complete maintenance
upgrades.
The change will reduce overall supplies by 10 percent, while warmer
weather leads to more driving and higher demand.
In addition, BP reported a power failure at its Carson refinery near the
Los Angeles harbor, the second-largest in California. Although power has been
restored, two units at the 266,000-barrel-a-day plant were off line for two
days.
And Valero's 78,000-barrel-a-day Wilmington refinery near Los Angeles
plans a partial shutdown next week for maintenance.
"It won't get to $4.50 again, will it?" asked Fran Munson, of Fremont,
referring to the highest price she recalls paying last year, when records were
shattered following several refinery problems statewide.
She paid $3.69 at a Chevron in Hayward on Saturday, a dime more than a
week earlier. As for her fear of $4-plus gas, that could be a reality by
Memorial Day, DeHaan said.
San Francisco-area drivers, for once, were not paying the most for gas in
California. Los Angeles' average price of $3.77 was five cents more than San
Francisco's, as the BP refinery shutdown sent prices there soaring.
Drivers in the South Bay were paying $3.64, a penny more than those in
the East Bay. The national average was $3.35.
Despite the anticipated forecast, the American Petroleum Institute
predicts that the average price for 2013 should be 20 cents a gallon lower
than last year across the country.
The reason: We are burning less gas and producing more.
U.S. oil demand fell to the lowest level in 16 years in 2012 as economic
growth weakened while domestic output surged. A combination of horizontal
drilling and hydraulic fracturing has unlocked supplies trapped in shale
formations in states including North Dakota, Texas and Oklahoma.
The Associated Press and Bloomberg contributed to this report.
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News Column
Gas Prices on the Rise Again
Jan. 29, 2013
Gary Richards, San Jose Mercury News
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Source: (c)2013 San Jose Mercury News (San Jose, Calif.) Distributed by MCT Information Services
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