The U.S. average price for regular gasoline jumped nine cents last week to settle at $2.65 per gallon. Gasoline has had a cumulative increase of 18 cents over the past three weeks.  West Coast gasoline shot up thirteen cents to $2.95 per gallon.  In California, the average price surged fourteen cents to reach $3.04 cents per gallon.
     The national average price for diesel fuel increased eight cents last week to $2.63 per gallon. On the West Coast, the average price increased six cents to $2.70, while the average in California jumped eight cents to $2.84 per gallon.
     The primary reason for these increases seems to be sentiment that demand will pick up soon.  This is surprising because gasoline inventory levels continue to rise, and refineries are continuing to slow production.  The improvement in the stock market has a big influence on the direction of energy prices.  Traders' buying trends are generally based on the economy and not on the fundamentals. 
     There was a second tropical depression that formed in the Atlantic this morning.  If the first storm strengthens further it will become Tropical Storm Ana.  The second storm appears to have more potential to hit the U.S. and could threaten the East Coast late next week.  Storms always have an impact on fuel prices, especially when they have the potential to come ashore in the Gulf region.  Crude oil prices were up today on that news, as expected. 
     A report out by OPEC notes that, in order to take advantage of the strong price of crude, OPEC members may be pumping more than the previously agreed-upon volumes.  Production of crude has increased worldwide by two percent since April. We have no additional capacity to store crude oil; gasoline inventories continue to build and remain high; we have refineries slowing production; there has been no increase in demand; and OPEC members appear to be cheating on their production quotas.  These fundamentals indicate a bearish trend.  So why are prices up?  The real question is what is going to happen when all the governments around the world stop pouring stimulus money into their economies. 
     
Dave Jackson 
Director of Commercial Fueling
NELLA Oil Company