California Pump Prices Could Hit $4 Soon
(Bloomberg) -- California is beginning to feel the ripples of oil refinery shutdowns in Texas, with gasoline prices rising faster in the Golden State since a deep freeze crippled fuel-making plants on the Gulf Coast.
Though the West Coast has its own oil-refining hub, independent from the Gulf, both regions supply Arizona, which now needs more fuel from California. That’s at a time when at least one major refinery in the Los Angeles area was down for maintenance and another had just restarted last week.
The refinery outages are adding support to a fuel market that was devastated by the pandemic and was already beginning to recover as lockdown measures ease and people get out more. For Californians, it means prices at the pump may reach $4 a gallon sooner than expected.
The gasoline blendstock in the so-called cash market in Los Angeles has jumped 17% since the cold blast blanketed Texas, reaching the highest since late 2019. At the pump, Los Angeles retail gasoline has already risen about 11 cents in a week to about $3.67 a gallon on Tuesday, according to data from auto club AAA. Prices at the pump usually take several days to reflect cash prices.
California refineries supply the Phoenix area with fuel via an east-moving pipeline. Texas refineries send it westward to the same markets.
Los Angeles gasoline also has been supported by Southern California refinery work. Phillips 66 restarted several units in Los Angeles last week, and returning to normal can take days or weeks. Valero had long planned a shutdown at its Wilmington plan through March.
© 2021 Bloomberg L.P.
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