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Charles Langley's blog

UCAN's Four-Day Gasoline Gougecast

Every Monday and Thursday evening, UCAN looks at the local gasoline market and predicts whether or not gas prices will go up or go down. We give the forecast to Consumer Bob at NBC 7/39, but you can also get it here and comment on our forecasts.

British Petroleum refinery fire could cause a superspike in California gas prices

In the last 24 hours gas prices have increased nine cents following news that British Petroleum / Arco's  massive Carson refinery had a flaring event early this morning. The unplanned flaring is expected to continue through Wednesday, according to Reuters, and was caused by an unspecified breakdown.

California gas prices at highest level ever for any February on record, surge 17¢ in one week.

In the last 48 hours, gas prices in San Diego have surged by nearly 10¢ a gallon. At $4.07 a gallon, San Diego's gas prices are the highest on record for any February in County history, including the year 2008, when gasoline prices hit an all-time record high of $4.64 a gallon on June 13, 2008. This trend is paralleled by a a national average of more than $3.54 a gallon, which is also the highest price on record.

Gas prices at highest level for any February on record.

At $3.77 a gallon, San Diego's gasoline now costs more than any February on record. The current high prices show that we may be on track for breaking the all-time record high of $3.64 a gallon in June of 2008.  But even if we don't break the all-time record, chances are excellent that you will spend MORE on gasoline in 2012 than you did in '08 because of sustained high prices.

Fuel prices out of synch with oil prices

Gas prices are at the highest level for any January on record at a current San Diego average of $3.77 a gallon.  This price is 43¢ higher than a year ago, but oddly, oil prices have not increased that much.  On a per gallon basis, oil only costs about 16¢ more per gallon than it did this time last year.

For gasoline, this could be the most expensive December in California history.

NYMEX WTI oil prices continue to flirt with the $100 a barrel barrier, and actually breached it at $100.86 last Wednesday.  Yet as the futures price of oil increased, gasoline prices have declined. Unfortunately, the probablility of additional decreases in retail gas prices is minimal if oil prices continue their upward trajectory.  

What's more likely to happen is that the price of Brent Crude from the North Sea will continue to drop while the price of WTI (West Texas Intermediary) will continue to climb.

Gas prices should decline slightly over Thanks Giving weekend

California gas prices remain at the highest level for any November on record, but, gas prices should decline slightly over the Thanksgiving weekend.

The current average for San Diego is $3.74.9 a gallon, down a nickel in the last week, and down 51¢ from this year's high of $4.26 a gallon for regular unleaded on June 5 , 2011. 

California gas prices are now highest for any November on record.

Adding fuel to the fires of a dismal recession is a new fact from OPIS, the authoritative Oil Price Information Service: California is now paying the highest price for fuel of any November on record.  Normally gas prices peak at some time in June and then plummet from the peak by about a dollar a gallon in November and December.  That hasn't happened this year.

Gas prices likely to surge: Two major SoCal refineries down

California Refineries by output
Gas prices have surged at the wholesale with reports that Chevron's massive El Segundo refinery and Arco's equally monstrous Carson refinery were taken offline. The two refineries produce 27% of California's fuel.
 

Analysis

Gas prices jump slightly over weekend

Gas prices rose by a more than a penny over the weekend -- not as much as we predicted in our last report, but still an abberrant increase during a time of year when gasoline prices should be dropping. Dioesel buyers however were in for a rude price shock and are destined to see even higher prices in the next few days.

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