California Business Minute™

Hi, I am Tim Johnson and welcome to the California Business Minute.

Crude oil price bottomed out at $32.40 and ended the year at $44.60 per barrel. Gasoline
prices in California and along the West Coast ended up at $1.75 per gallon on Christmas –
so what gives?  Here’s some insight.

Factors Affecting Higher Gas Prices in California:
• The Tesoro refinery in Anacortes, Washington stopped supplying gasoline to stations 
   in the Southern California area and it is also shut down for earlier than scheduled maintenance.
• The BP/Arco refinery in Carson has had one of their Fluid Catalytic Cracker units down for 
   the last two weeks.
• Valero cut back production at their California refineries in December.
• China has been buying "cheap" crude oil to fill its own strategic reserve.
• Fears about ongoing violence in the Gaza strip along with Russia’s Gazprom has been cutting 
  off natural gas shipments to the Ukraine and Western Europe are throwing uncertainty into 
  shipments of crude oil from the Middle East.
• Los Angeles wholesale unbranded gasoline jumped a whopping 16 cents per gallon New Year’s
  Eve.
• Flying J advised their main crude oil supplier to the Big West refinery in Bakersfield that they
   would be unable to take its crude oil production after declaring bankruptcy last week. They are
   also in the midst of “unscheduled” maintenance on their hydro cracker at that refinery.

All of these beg the question, what should California do? One solution, see the article, ‘Should
California Create a Strategic Oil Reserve?’ at www.CalBizBlog.com

I am Tim Johnson and this has been the California Business Minute.