County gasoline prices continue downward spiral as crude oil stocks remain plentiful.

County gasoline prices continue downward spiral as crude oil stocks remain plentiful

Retail gasoline prices continued to slide last week at self-serve stations in Los Angeles County - by 2 cents to 7 cents a gallon - although prices posted for crude oil produced here were unchanged.

That, of course, was good news for local motorists and truckers but bad news for refiners, whose margins were squeezed.

Unchanged, or "stabilized," crude prices represented moderately good news for thousands of Angelenos with stakes in local oil wells here, who had seen posted prices for crude plunge $8 a barrel in L.A. since Jan. 17. That was after the United States launced its unexpectedly successful air attacks against Iraq's military as the first part of Operation Desert Storm to force Iraq from Kuwait.

Gasoline and crude prices do not necessarily go in lockstep, said Charles E. (Ed) Malmgreen. It looks like gasoline prices are catching up with crude prices after their fall, remarked the assistant vice president of California Independent Petroleum Association.

Reflecting this, a Mid-Wilshire Arco station cut its retail price for unleaded, 87-octane gasoline to 99.9 cents a gallon last week from $1.069 the prior week, $1.099 three weeks ago and $1.149 four weeks earlier.

A Glendale Arco station and a Mixville Arco station were both pumping the same gasoline last week for the same retail price, which was down 2 cents a gallon from the prior week.

Indeed, many Arco and Unocal self-serve stations last week were pumping unleaded, 87-octane motor fuel for less than $1 a gallon, a remarkable development.

A buck a gallon had been the floor for months here until one high-volume Unocal station on Vermont Avenue at the north-bound Hollywood Freeway onramp cut the retail price to 99.9 cents two weeks ago. Since that price has spread here, the station last week cut another 4 cents to 95.9 cents a gallon, a price quickly emulated by a nearby Arco station near Barnsdall Park.

"There's plenty of gasoline supply," declared Harry G. Johnson, manager of marketing pricing and volumetrics at L.A.-based Atlantic Richfield Co.

West Coast gasoline stocks, according to the latest statistics issued last week by American Petroleum Institute, totaled a towering 32.91 million barrels as West Coast refineries ran at a relatively high 85.9 percent of capacity. The gasoline stocks figure was virtually unchanged from the prior week's lofty 33.00 million barrels and slightly above the 32.77 million barrels of a year earlier, according to API data.

However, Arco's Johnson asserted the rate of decline for retail gasoline prices here "has to stop soon. I expect the decline rate to slow, then flatten out the latter part of February" before refineries start closing down partially in March to effect periodic maintenance.

However, that optimistic scenario could be thwarted by the new aggressive marketing strategy of L.A.-based Unocal Corp. "It looks to me like we now have an old-fashioned gasoline price war here," declared a local analyst who requested anonymity.

Even Arco's Johnson remarked on Unocal's new strategy. Unocal disclosed plans last week to hire the investment banking firm of First Boston Corp. to help evaluate possible disposal of the company's southeastern marketing operations and its national truck-stop network.

Unocal is taking steps Arco took years ago to focus on its West Coast operations, Johnson commented. Reluctant to give aid to the competition, though, he declined to reveal any new strategic moves Arco now is planning.