California could be up for an increase in gas prices amidst a shortage of oil and refining components for the state’s blend of gas, with prices potentially reaching $4 per gallon in an unique development happening against the background of downward national trend.
One gallon of unleaded gas has already become more expensive in the Los Angeles area by an average of 12 cents, bringing the area average gallon price to $3.66, as data pertaining to the Automobile Club of Southern California indicates. Statewide, the average cost was driven up by 6 cents to $3.50. However, Orange County Chevron stations were already going past the $4 mark on Friday.
The spokeswoman of the Automobile Club of Southern California has stated that signs certainly point towards a state average of over $4 per gallon, attributing it to the state having its lowest quantity in its unique gas blend supply in over a year, which seems to have been caused by a lack of ingredients necessary for it.
Other analysts point towards the fact that this is a result of California slowly becoming less attractive for foreign oil suppliers due its price fall tendency, which could ironically become the exact factor which might reel significant gas imports into the state again. A recently shut down refinery in Torrance also contributed to lower production and as such higher California gas prices.
The U.S. Energy Administration has stated that over 1 million barrels of pre-refined gasoline were used last month in California from its own supply, with no gasoline headed towards its coast recently. The depletion was more accentuated in the southern part of the state.
Senior petrol analyst Patrick DeHaan predicts that Californian gas price can still rise by about 50 cents on average and that it will peak at over $4 next week, before a predicted burst of foreign import will steadily drive it down.
Average gas prices nationwide have dipped by 2 cents in the last two weeks, with the national average being now at $2.83 per gallon; midgrade gas averaged $3.05, while premium cost $3.22.
Worldwide, gas prices are expected to take a further hit if Iran reaches an agreement on restraining its nuclear activities and effectively opens better worldwide economic ties, as the country has an important oil supply ready to be exported which might amount to about 500,000 gallons per day.
Image Source: Daily Mail