STOCK MARKET WATCH -- Friday, 5 October 2012

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26. California Refiners Ration Gasoline as Prices Near Record

http://www.bloomberg.com/news/2012-10-05/california-refiners-ration-gasoline-as-prices-near-record.html

Exxon Mobil Corp. (XOM) and Valero Energy Corp. (VLO) are rationing gasoline deliveries to customers in California as refinery halts cut into the state’s supplies, driving pump prices toward record highs.

Valero stopped spot sales in southern California and is allocating the rest of its deliveries to customers. Exxon is also rationing to buyers at West Coast terminals. Retail prices in the state jumped to an average $4.486 a gallon, according to data published today by AAA, the nation’s biggest motoring organization.

California’s gasoline markets are particularly susceptible to refinery outages because the state is mostly cut off from oil-products pipelines spanning the rest of the country, according to the U.S. Energy Information Administration. The latest shortage forced retailers in the Los Angeles-area, including Costco (COST) Wholesale Corp., to run out of supplies, shut pumps and, in some cases, charge their highest prices ever.

“We’re really sort of shell-shocked,” said Tom Robinson, president of Santa Clara, California-based Robinson Oil Corp., which operates 34 Rotten Robbie convenience stores. “If you’ve been in California long enough, you know how volatile our market can be. But to see prices go up $1 a gallon since Monday -- I’ve never seen that before.”