Refinery outages plague California

| 8/26/2005

A fire at a refinery in California has caused a bit of a bump in gasoline prices there. Diesel, which was already at record levels, appears to be mostly unaffected.

ProMiles reported an average diesel price in California of $2.998 per gallon on Friday, Aug. 26, up less than 2 cents from the day before.

Following a fire on Wednesday, Aug. 24, at Tesoro Corp.’s Golden Eagle refinery in Martinez, gas prices in the state were on the rise, spilling over the $3 per gallon mark in many areas. The national average for gasoline for the state on Friday, however, was $2.79 per gallon, according to AAA.

Meanwhile, rumors of a shutdown at one of Shell’s refineries – also in Martinez – sparked concern about diesel prices. Shell would not confirm the status of the refinery to Land Line.

But given the rash of refinery problems California has seen in recent weeks, even a rumor of trouble can cause prices to spike.

What’s more, as winter approaches, more refineries will begin shifting their attentions to producing heating oil, which will further tighten capacity.

In spite of these concerns, oil prices actually fell on Aug. 26 as buyers took a chance that Hurricane Katrina would miss oil-drilling rigs in the Gulf of Mexico.

Prices for light, sweet crude fell to $66.15 per barrel on Friday, down from a record high of $68 per barrel on Thursday, Aug. 25.