California gas prices stabilize, seen heading downward
Published:
Tuesday, 9 Oct 2012 | 9:35 PM ET
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LOS
ANGELES (Reuters) - California's record-high gas prices held steady on
Tuesday and were expected to begin dropping later in the week, but a
rise in wholesale prices suggested the decline could be more moderate
than market analysts had previously anticipated.
The
average price of a gallon of regular gas in the state was up
three-tenths of a cent on Tuesday to $4.671, which marked the lowest
one-day increase since prices began to spike at the beginning of last
week, said Marie Montgomery Nordhues, spokeswoman for the Automobile
Club of Southern California.
Nevertheless, prices remained higher than $5 a gallon at many gas stations in the state.
"The
consensus seems to be they're probably peaking and hopefully will be
heading in the other direction real soon," Nordhues said.
Retail
prices surged by more than 50 cents a gallon last week and wholesale
prices rose by almost a dollar a gallon after a series of refinery
mishaps pinched supplies. Trading market sources said a possible "short
squeeze" that came about when a big refiner was forced to buy fuel on
the spot market may also have been a factor.
The
price spike ended after California Governor Jerry Brown on Sunday
ordered that service stations be allowed to begin stocking cheaper and
more plentiful "winter-blend" fuel three weeks ahead of schedule.
Wholesale prices dropped by 60 cents a gallon Monday and analysts said a
sharp fall in retail prices would follow within about a week barring
further market disruptions.
The
huge jump in gasoline prices has unnerved drivers in car-loving
California and led to calls from California's two U.S. senators for a
federal investigation of possible manipulation in the gasoline trading
markets.
Richard
Benes, an attendant at a 76 gas station in the coastal community of
Marina del Rey, adjacent to Los Angeles, said he does not anticipate
retail prices will fall soon.
"Prices just jumped ... but we can't expect them to go back down just as quickly," Benes said.
Sam
Larkin, 43, a medical supply salesman filling up his minivan at an Arco
station in West Los Angeles where the price of regular unleaded stood
at $4.79, expressed skepticism the price spike is beginning to reverse
itself. "I won't believe they're (prices) going down until I see it," he
said.
WORST IN CALIFORNIA
The
average price of a gallon of regular in Los Angeles-Long Beach metro
area stood at $4.705 on Tuesday. Prices were even higher in San Luis
Obispo in central California, which had the most expensive gas in the
state at $4.75 a gallon on average, Nordhues said.
In
a sign of improvement, the Southern California areas of Orange County,
Riverside, San Bernardino and San Diego all saw prices fall slightly on
Tuesday, Nordhues said.
But
wholesale prices in the Los Angeles market rose by 26 cents a gallon
Tuesday after Exxon Mobil Corp said in a regulatory filing that it would
move ahead with planned work on its Torrance facility near Los Angeles
for the remainder of the October.
A power failure at that plant contributed to last week's price surge.
Meanwhile
Chevron said a key unit at its Richmond refinery, which suffered a
major fire in August that also contributed to the supply squeeze, would
remain shut through the end of the year -- the long end of its earlier
estimates.
State
Senator Juan Vargas, a Democrat representing areas near San Diego, on
Tuesday joined calls for an investigation into gas prices, calling on
the state to probe the issue.
Senator
Dianne Feinstein on Sunday called for a Federal Trade Commission
investigate gasoline trading markets and establish a new oversight
regime. On Monday Senator Barbara Boxer asked the Department of Justice
to investigate the issue.
(Additional reporting by Jonathan Leff and Erwin Seba; Writing by Alex Dobuzinskis; Editing by Jonathan Weber and Ed Davies)
end quote from:
As soon as Governor Brown and Senator Feinstein started to investigate the oil companies price gouging you notice the oil prices went down.
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