A three-hour fire at the Tesoro oil refinery in Wilmington pushed wholesale gasoline prices up almost 21 cents a gallon Friday. Retail prices were expected to rise by a nickel or more in the coming days, depending on the amount of damage at the facility and the production declines that could result.
As of Friday afternoon, the severity of the fire was still being assessed and the refinery was operating at reduced levels, Tesoro officials said.
"Before this fire, the price was about to drop like a rock," said Tom Kloza, chief oil analyst for the Oil Price Information Service in New Jersey. Kloza said the Wilmington incident and a smaller fire at a Chevron refinery in Richmond in the Bay Area were particularly ill-timed for California consumers.
"Instead of falling sharply, the price will go back up," Kloza said.
Another price expert, Bob van der Valk, said retail costs in California would jump by an average of a nickel a gallon in the short term, and perhaps more. But he also predicted a collapse in retail prices by the Thanksgiving holiday that he said would be brought on by low demand and increasing supplies.
"The national average will be around $1.75, and even California gasoline will be under $2 a gallon," said Van der Valk, who tracks fuel prices for 4Refuel, which helps companies buy fuel more economically for their fleets.
Concerns over the magnitude of the fire damage also kicked oil higher during the trading day, but much of that earlier gain was lost. Crude oil futures for November delivery closed up 13 cents at $66.02 a barrel.