I am forecasting that Southern California gasoline prices will either stay flat or increase through Thursday by as much as 5¢ a gallon. Price volatility has rocked local California gasoline wholesale markets over the weekend, but it doesn't have anything to do with oil prices or Iraq. In fact, crude oil prices have actually declined from 50¢ to $1.00 a barrel since last Thursday, so the "panic premium" on oil prices isn't manifesting as feared by so many.
In California, Chevron's El Segundo refinery is reported as having problems, and Exxon Mobil's Torrance refinery is still offline. Both of these refiners are driving up the cost of of surplus fuel on the spot market, with prices screaming up as much as 12.5¢ a gallon from some refineries over the weekend. The market seems to have cooled down a little today, but wholesale prices are still firm. Currently an "average" brand name retailer is making about 15¢ a gallon. Most retailers need to see about 20¢ a gallon profit to stay in the game, so I am predicting that prices could stay flat or climb as much as 5¢ a gallon on average in Southern California.
Charles Langley has predicted retail gas price movements with 98% accuracy twice-weekly since 2006 in Southern California. He can be reached at (858) 752-4600