Retail gas prices in California jumped last week after an explosion at Exxon Mobil’s Torrance, California refinery and it's very likely prices could be heading even higher as the oil giant works to bring the facility back to full production. “They’re going to need more supply, if prices keep climbing or even if they stay where they are now,” says Jeff Mower, director, Americas Oil News, a unit of Platts.
Prices at the pump in California are averaging $2.86 a gallon 25% above the national average according to AAA and could reach $3.00 a gallon in near future. Complicating the situation, explains Mower, is the disruption comes at a time when the state is already dealing with tighter supplies. “This explosion came at a time when refineries were already operating below capacity. It's refinery maintenance season.” This seasonal pattern is tied to rising prices in and around Los Angeles even before the Torrance explosion.
In a statement, Exxon Mobil (XOM) tells Yahoo Finance, “The refinery’s flare system is operating as designed and will continue to safely burn hydrocarbon gases while we continue to stabilize refinery operations. The non-impacted units of the refinery continue to operate.”
As of Friday, Exxon has not disclosed a timetable for when the refinery, which produces nearly 10% of all gasoline sold in California, will be fully operational. However, experts like Mower, warn it could be months. “Market sources tell us it could be down for like six months.” A six month time frame is likely to send prices at the pump in California even higher into the summer driving season
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