Gas at $5.51 a Gallon in Los Angeles? Prepare for More Increases as a Result of Refinery Fire
If this heat wave has you down, just wait until your next gas station visit.
A fire at a Chevron refinery near San Francisco last Monday knocked out a portion of one of California's key sources of gas, squeezing supplies and sending prices to a higher plateau, even as the rest of the country enjoys relatively leveled-off summer prices.
The refinery produced nearly two in 10 gallons used by Californians, and it's not clear when it will go back on-line. Meanwhile, prices are already spiking:
We found one station, the Mobil at 201 S. Azusa Ave. in West Covina, with a pioneering price of $5.51 a gallon for premium.
We called the station but had no luck getting through.
Tom Kloza, chief oil analyst at the Oil Price Information Service, told the Weekly that the spike is temporary: He expects lower fall prices to return as scheduled:
I'm not in the camp that believes that this is the next apocalypse. This is not a return of 2008. This is not the fulfillment of the prophesies of some folks who said get ready for $5, $6 gasoline.
The AAA of Southern California says gas prices settled a bit today, at $4.095 in the L.A. metro area, but Kloza says they will continue to climb this week as retailers react to an increase in wholesale fuel squeezed by a supply shortage in the Golden State.
You'll drift higher tomorrow. The delayed reaction hasn't run its course.
But it won't last forever:
We're above $4 in California, but you'll see prices below that by Thanksgiving or Election Day. It's not the new normal.
The new normal is lower prices from November through February.
[Update at 3:28 p.m.]: Or maybe not. The Oakland Tribune reports that hazmat crews were battling yet another blaze this afternoon at a Shell refinery in Martinez, Calif., which is in Contra Costa County. The fire is described as small but still, this can't bode well for prices.
[Added at 4:06 p.m.]: This fire at Shell's "light oil" processing area in Martinez was short-lived, and that's probably a good thing:
We had a small fire in a unit at our light oil processing area at about 2 p.m. and it was put out in about 10 mins by our fire crews.— Shell Martinez (@Shell_Martinez) August 13, 2012