Tight Supplies Hint at Summer Gas Spike

Record low U.S. gasoline inventories have pushed gas prices to nine-year highs ahead of the driving season, and analysts said a summer gasoline crisis will be averted only if the nation’s refineries can swiftly ramp up production. In the isolated California market, the specialized cleaner-burning gas required by air pollution regulations is produced primarily within the state. Gasoline inventories in California are somewhat lower than normal, but the situation is better than in the rest of the country, analysts said. Last year, refinery problems in California sharply restricted supply and sent gasoline prices soaring. Nationwide, gasoline stocks have fallen to just over 200 million barrels, the lowest February levels in a decade, according to the American Petroleum Institute. Low inventories and high prices are the result of global oil production cuts that began last spring, combined with increased demand for petroleum products. Officials at the Energy Information Administration said recently that all the ingredients for a continued price spike exist, and they predicted retail prices could hit all-time highs of $1.40 or more a gallon nationwide by the height of driving season.