This Week in Petroleum – May 15, 2019

West Coast retail gasoline prices increase because of refinery outages and declining inventories

On May 6, 2019, the California retail gasoline price averaged $4.01 per gallon (gal) and the West Coast retail gasoline price averaged $3.71/gal. In comparison, the U.S. retail gasoline price averaged significantly lower at $2.90/gal. Gasoline prices have not neared the $4/gal price in California since the high crude oil prices in 2014 and the Torrance refinery outage in 2015 (Figure 1). Gasoline prices dropped slightly on May 13, 2019, with California prices averaging $3.97/gal. Since the beginning of 2019, the price of gasoline on the West Coast has increased by $0.68/gal and the price of gasoline in California increased by $0.79/gal. Over the same period, the price of Brent crude oil, the primary driver of U.S. gasoline prices, only increased by $0.40/gal. Reduced refinery production of gasoline due to planned and unplanned outages and declining gasoline inventories in a region with limited and expensive resupply options have contributed to the sharp increase in West Coast retail gasoline prices.

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