Stability could be fleeting, analyst says, as California average pauses at $3.92.
The surge in gasoline prices has stopped for now. The grumbling hasn’t.
As the average price in California settled at $3.92 a gallon Friday, consumer advocates raged about the latest big oil-company profit report — $5.17 billion from San Ramon’s Chevron Corp. — while presidential candidates bickered over the fuel taxes paid by motorists.
Market analysts said prices appear to have stabilized but warned that anything could happen.
"For the moment we may have seen the peak," said analyst Denton Cinquegrana, who follows the West Coast markets for the Oil Price Information Service. "But it’s not confirmed that it’s behind us. We still have a shot at higher prices."
The U.S. average actually fell a tenth of a penny Friday, to $3.62 a gallon for self-serve regular, the first decline in 18 days. Sacramentans paid an average of $3.91 a gallon, the same as the day before.
Santa Barbara had the state’s priciest gas — $4.02 — among the 25 markets surveyed daily by AAA. But even there, the price was essentially unchanged from the day before.
Advocates rip Chevron What happens next? Much will depend on crude oil prices.
Crude retreated from its record of nearly $120 a barrel earlier this week but shot back up again Friday on news that Turkish warplanes had bombed Kurdish bases inside Iraq. Crude jumped $3.80 a barrel on the New York Mercantile
Exchange to $116.32.
Another jolt of higher fuel prices could be very damaging. The price of gas is weighing down an economy already struggling with a collapsed real estate market. Some experts believe gas costs will tip the economy into a recession, if it hasn’t tipped already.
But investors were heartened that Friday’s monthly unemployment report showed a net loss of only 20,000 jobs, well shy of what was expected. That sent the stock market up slightly.
Costly crude oil is good for oil companies. Chevron reported a 10 percent increase in first-quarter profits, the latest of the oil giants to report multibillion-dollar earnings this week.
The report brought an immediate rebuke from Consumer Watchdog, a statewide advocacy group based in Santa Monica, which accused the company of "profiteering."
The group was particularly annoyed that Chevron spent $2 billion buying back its stock instead of using the money to invest in things such as alternative fuels.
Chevron’s profits didn’t please motorists such as Casey Hazelhofer, a McGeorge School of Law student filling up Friday at a Chevron station on College Town Drive in Sacramento. The station was selling self-serve regular for $3.90 a gallon.
"I’m paying $60 to fill a Mustang — that seems a little unreasonable," she said.
Yet economist Severin Borenstein said blaming the oil companies for hefty profits is pointless.
"We shouldn’t be outraged. They own the oil, and the price of oil went up," said Borenstein, director of the University of California Energy Institute in Berkeley.
"They don’t raise the price of oil," he added. "Who does (raise it) is you, me and everybody who buys oil products. It’s the expanding Chinese economy, the expanding use of automobiles in India."
Another factor: Saudia Arabia has declined to ramp up production, he said.
"That’s their right," he said. "It’s their oil."
Borenstein did join the chorus of economists criticizing proposals by Democrat Hillary Clinton and Republican John McCain for a "tax holiday" that would temporarily remove the federal gas tax. The tax is 18.4 cents a gallon.
Critics say eliminating the tax would increase fuel consumption, leading to another surge in prices. Any savings that did flow to the consumer would be minimal — perhaps as little as 30 cents a day, Borenstein said.
Eliminating the tax also would "send a bad signal" at a time when consumers need to be conserving as much fuel as possible, he said.
Consumers using less gas Motorists do seem to be conserving. Gas consumption in California fell 4.5 percent in January compared to a year earlier, the state Board of Equalization said this week. Prices on average were 26 percent higher than a year earlier, the agency said.
The cutback in fuel usage shows that consumers eventually do respond to higher prices, said Dan Sperling, director of the Institute of Transportation Studies at the University of California, Davis.
His research has shown that in the short run, consumers complain about high gas prices but don’t really do anything about it. That changes once they’re convinced the higher prices are permanent.
"What’s going on here is that prices have been high enough, long enough," he said.
Evidence of that came this week with the monthly vehicle sales reports from the major automakers. Sales of gas guzzlers were down dramatically, while hybrids and subcompacts grew in popularity.
Efforts to conserve could keep a lid on prices even as the summer driving season kicks off in three weeks with Memorial Day weekend. Summer demand usually drives up prices.
"The people have kind of spoken with lower demand for gasoline," Cinquegrana said. "I don’t see demand spiking just because Memorial Day gets here."
That has many in the travel industry wondering what the summer will bring. Trips already planned likely will go forward, but impulse getaways might be curbed, said Michael Geeser, spokesman for AAA of Northern California and Nevada.
"Weekend getaways to Tahoe and Vegas may not happen as often," he said. "Weeklong trips to Disneyland and the beach will probably still happen."
But Patrick Ronan, a hotel owner and chairman of the Lake Tahoe Visitors Authority, said he believes the weak economy and high gas prices will mean vacationers will visit places relatively close by.
"With the economy not doing well, we think that Californians will not travel as far but they’ll obviously keep traveling," said Ronan, whose Tahoe Lakeshore Lodge & Spa is on the California side of the south shore. "Being in the backyard of the biggest market in the country, we think we’re pretty well set."
To use the AAA Gas Finder to look for the lowest prices in your area, go to: http://www.sacbee.com/links
Big oil, bigger bucks:
Trend in profits for the five largest oil companies in the United States, in billions, with percent increase, 2003-2007:
ExxonMobil ’03: $21.5 ’07: $40.6 +89%
Royal Dutch Shell: ’03: $12.3 ’07: $31.3 +155%
BP ’03: $12.4 ’07: $20.8 +68%
Chevron ’03: $7.2 ’07: $18.7 +160%
ConocoPhillips ’03: $4.7 ’07: $11.9 +153%
Source: Company reports
At the pump as prices have stabilized over the past few days but are up significantly from last month.
Sacramento Bee Average prices for a gallon of self-serve regular:
Friday / Month ago
U.S.: $3.62 / $3.29
California: $3.92 / $3.65
Sacramento: $3.91 / $3.65
San Francisco: $4.01 / $3.78
Los Angeles: $3.90 / $3.62
$4.02 / $3.75
Chico: $3.89 / $3.58
Yolo: $3.90 / $3.65
Could be worse — Average U.S. gas prices are among the lowest in the world.
* As of May 1
NOTE: Countries surveyed between March 19 and April 1
Most expensive countries:
1. Norway: $8.73
2. United Kingdom: $8.38
3. Netherlands: $8.37
4. Monaco: $8.31
5. Iceland: $8.28
6. Belgium: $8.22
7. France: $8.04
8. Germany: $7.86
9. Portugal: $7.84
10. Italy: $7.73
159. Venezuela: $0.12
158. Iran: $0.40
157. Saudi Arabia: $0.45
156. Libya: $0.50
155. Swaziland: $0.54
154. Qatar: $0.73
153. Bahrain: $0.81
152. Egypt: $0.89
151. Kuwait: $0.90
150. Seychelles: $0.98
Note: All prices are for a gallon of unleaded gas
Contact The Bee’s Dale Kasler at: [email protected] or (916) 321-1066. The Associated Press contributed to this report.