Fuel Rises Regionally

Brian L. Milne, Refined Fuels Editor, Telvent DTN


Retail gasoline prices in California gained during the Thanksgiving Day holiday weekend, and are poised to move higher after wholesale prices in the state’s fuel market moved up sharply on aggressive buying. The increase in the Golden State’s gasoline prices halts a trend for decreasing values in the state’s wholesale market, and compares to mostly shallowly mixed changes in major metropolitan markets elsewhere in the United States.


In California, wholesale markets moved up sharply during the Thanksgiving holiday week, which coincided with a move to trading for December deliveries and a higher Reid Vapor Pressure of 12.5psi from 10.5psi in the Los Angeles market. The San Francisco market has already transitioned to 14.0psi RVP.


There were no specific triggers to a better than 9-cent spike in wholesale gasoline prices in L.A., such as a refinery outage, with trade sources saying the higher prices reflected a market short on product.


California requires the ethanol content in their gasoline to increase from 5.7% to 10% effective Jan. 1, with the state allowing refiners to make the transition earlier. Some suppliers have reportedly set Dec. 1 as their start date.


There were no clear indications if the higher ethanol blend ratio is having an impact to gasoline prices in the state. Ethanol is trading 15cts to 20cts higher than gasoline in California’s wholesale market.


Elsewhere in the country, retail gasoline prices will move mixed this week, with oil’s financial markets recovering after slumping to six week lows the day after Thanksgiving.


View DTN’s Weekly and Historical Gas Prices.


Gasoline prices, through its relationship with crude oil, have been choppy as they follow volatile trade in the US dollar. The US dollar had slumped to a 14-year low against the Japanese yen over the Thanksgiving Day holiday, but subsequently rallied after news that Dubai World would delay its repayment on billions of dollars in debt. The risk of a possible default by the Middle Eastern conglomerate sparked fear of a ripple affect impacting other countries, luring investors to the greenback. Since then, the US dollar has again weakened.



About the Author

Brian L. Milne is the Refined Fuels Editor for Telvent DTN-a leading business-to-business provider of real-time commodity information services. Milne has been focused on the energy industry for nearly 14 years as an analyst, journalist and editor. He can be reached at brian.milne@dtn.com.


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