Both crude oil and diesel prices set records on Thursday, Aug. 11, with
crude oil topping $66 per barrel and diesel prices reaching as high as $3.43
per gallon in California.
Trading for light, sweet crude lurched beyond $66 per barrel in trading
on the New York Mercantile Exchange on Thursday, before dropping back down
closer to the $65 mark.
Meanwhile, ProMiles reported an average price of $3.01 per gallon for California on Aug. 11. Individual stations, however, were pushing prices well beyond that.
A Shell station in Pasadena confirmed for “Land Line Now” that its diesel was
selling at $3.43 Thursday morning. Several other stations had posted prices
between $3.30 and $3.40 per gallon, according to the Web site
Refinery troubles and tight supplies are being blamed for skyrocketing
diesel costs in California, but a Los
Angeles Times story revealed there may be another reason.
The Times reported
that, in June, oil traders sold large quantities of diesel to Chile and Mexico. At the time, traders maintain, they were faced with an oversupply of diesel, so
they sold some of the surplus to buyers in Chile. The fuel that went to Mexico was said to have too much sulfur content to be used in the United States.
Unfortunately, the timing was bad. The sale occurred just days before a
fire shut down a Chevron oil refinery in El Segundo, CA. So without the
surplus, the state was unable to handle the post-fire shortage.
Because of the fire, Chevron has limited sales to its own stores and to
customers with supply contracts.