Refineries are raising gas prices even though there is a surplus of gasoline. 

( Learn how they can do it  HERE ) 

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In an August 25, 2009, story copyrighted by OPIS, the Oil Price Information Service, reporters Edgar Ang, and Karyn O'Connor say that even though the price of gasoline is climbing, there is no shortage of fuel.  In fact, there is a surplus.  According to the article, "the West Coast is not facing any acute gasoline supply shortages, as reflected in higher year-on-year stocks." 

What this means is that the West Coast market is swimming, and perhaps even drowning, in surplus gasoline.  According to OPIS, foreigners are importing surplus into the state, creating an even bigger problem for refineries by increasing the amount of surplus gasoline available to unbranded retailers and other aggressive cost-cutters.

This is what the OPIS article says ...

" ... the West Coast is facing added pressure from continuous Asian imports.

Even though the arbitrage window is currently closed, sources say a few 
Asian gasoline cargos have found their way to the West Coast. Mexico's 
PMI and ConocoPhillips were both said to have imported and sold cargos 
on the West Coast recently. ConocoPhillips has been cited as an active 
conventional seller in Los Angeles, as well as in San Francisco. "A few 
people brought in (conventional)cargoes over the last month, so the 
refiners who make it are struggling to move what they are producing."
One market watcher said. "No one wants it."

That's right, when it comes to gasoline  "No one wants it."  And the reason 
"no one wants it"is because when the supply of fuel increases, the price 
should drop. This is what the OPIS reporters refer to as "added pressure" 
on the refineries. In layman's terms, "added pressure" can be translated 
as "downward price pressure created by massive amounts of surplus 
gasoline."  
Of course gasoline prices are increasing right now, and appear to be headed 
toward the $3.25 a gallon mark by Labor Day.   To learn the tricks California 
refiners use for fixing their price "problems" see our blog.  

(Find cheaper gas in your San Diego neighborhood, at UCAN's Fueltracker!)    

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