Retail gasoline prices fall in U.S., edge up in California
The U.S. average retail gasoline price fell for the 25th straight week to a level not seen since early 2004, the Energy Department said today.
But California's gasoline prices inched higher by nearly half a penny over the week as supplies lagged behind even the weakened demand for crude oil.
Crude oil for February delivery traded as low as $37.53 in light action before rising $2.31, or 6%, to end at $40.02 a barrel on the New York Mercantile Exchange as traders worried about continuing Israeli military strikes into the Gaza Strip.
"Six months ago there would have been a lot of concern in the oil markets over what the Israeli strikes might mean for oil production in the region, but unless this conflict spreads to other countries I think this is going to be a small, short-term bounce for oil," said Phil Flynn, vice president and senior market analyst for Alaron Trading Corp. in Chicago.
Oil's plunge from the peak above $147 a barrel last summer is continuing to pay off for consumers at the pump.
The U.S. average price of a gallon of self-serve gasoline fell 4 cents to $1.613, according to the Energy Department's weekly survey of filling stations. That was the lowest average since $1.595 gasoline was recorded Jan. 19, 2004. A year earlier, the national average was $3.503 a gallon.
California's gasoline prices rose 0.4 cent over the week to an average of $1.810 a gallon, adding to the previous week's increase of nearly 7 cents a gallon, but the state's latest average was still $1.488 cents lower than the year-earlier price.
The increase has caused concern among groups such as Consumer Watchdog, which blamed what the Santa Monica organization called a sharp and unnecessary cutback in California refinery output.
But Joe Sparano, president of the Western States Petroleum Assn., said refiners were merely responding to the economic slowdown and the sharp drop in gasoline demand among the state's motorists.
In addition, some California refineries have reported supply-squeezing equipment malfunctions. Few refineries outside California make the state's special blend of clean-burning gasoline.
A spokesman for the California Energy Commission said today that the agency didn't regard the drop in refinery production as significant.
Tom Kloza, chief oil analyst for Oil Price Information Service in New Jersey, said that California and the rest of the country could probably count on higher gasoline prices early next year.
"There will be a strong rally in West Coast prices, but probably not until February," Kloza said.
ron.white@latimes.com
