Gas Price Watch

Sunday, March 1, 2015 – 11:00 a.m.

The Inland Empire’s out-of-control climb in gasoline prices added another 10 cents per gallon Saturday.

The latest increase capped off a week of historical price hikes by California oil companies.

This blog has been using ARCO, a deep-discount detergent gasoline, as our benchmark.

The ‘Gouge”

In the past month, the price has now climbed $1.10 from the low of $2.19 per gallon. That’s an increase of 50.22%.

The hike in gasoline prices comes as the futures contract price for April delivery of West Texas Intermediate Crude Oil (WTI) closed at $49.52 per barrel. The price is $5.15 off the contract low of $44.37 per barrel. A price gain of only 11.61%.

The difference between gasoline and crude price movement is now an astounding 38.61%. In other words, Oil companies are buying crude at under $50 per barrel and setting gas pump prices at a level that would have crude oil trading at over $100 per barrel.

The oil ‘glut’

The jacking up of prices comes in the middle of an oil glut. In other words the world is drowning in an oversupply of oil.

Oil storage facilities at Cushing, Oklahoma are nearing full capacity, while near record oil production has only slowed slightly, with some excess production of some 47 million barrels in the past five weeks.

The ‘excuses’

Then we have the news outlets, who seem to be buying the dribble from the oil companies.

Let’s see. The switch to cleaner summer blend gasoline is hampering supplies, plus it’s more expensive to make. The ExxonMobil refinery explosion, in Carson, and where no one went to the hospital, has reportedly cut supply. Add to it the fact that state regulators want the refinery to stay shut down until they get a handle on just what exactly happened.

What that means is anyone’s guess. The cause has apparently already been identified.

Then there’s the Tesoro Refinery shutdown due to a strike.

The ‘truth’

But no one is talking about California’s gasoline supplies going to zero! In fact, gasoline supplies have not been severely impacted to justify a huge price run up.

To read the latest California Energy Commission Fuel report, click here.

But make no mistake. Oil companies are making a huge windfall on the backs of California driver’s.