Gasoline, crude oil prices spout in county.

Economics, international unrest shove prices upward

Prices of both gasoline and crude oil spurted higher during the first half of April in Los Angeles County.

This, of course, was good news for petroleum refiners, crude producers and thousands of Angelenos with stakes in wells here but bad news for local motorists and truckers.

Los Angeles-based Unocal Corp., for example, hiked its posted prices for crude produced in L.A. County twice in April's first half, three times in less than 30 days. Each of the three increases amounted to 50 cents a barrel across the board.

Those hikes, for example, increased Unocal's posted price for 17-degree gravity crude at the Wilmington field to $12.15 a barrel -- the highest since $12.85 was posted last Dec. 5. Unocal likewise raised its price for 29-gravity crude at the Long Beach/Signal Hill field to $13.80 a barrel, which was the highest since Dec. 10 when $14.20 was posted.

Posted prices for crude produced here generally had been sliding since Nov. 18 until a reversal began March 11.

Two major factors have entered into the latest crude price hike, remarked Albert J. Anton Jr., perhaps the nation's premier petroleum analyst, at Carl H. Pforzheimer & Co., a New York brokerage house of which he is a partner:

* Supply and demand. Petroleum product demand has perked up in both Asia and Europe, Anton observed, and United States companies have increased their product exports. Such exports, in turn, have helped to use up an overhang of 33 million barrels of gasoline on the West Coast, he indicated.

Indeed, according to the latest figures reported last week by the American Petroleum Institute, West Coast motor gasoline stocks slipped to a relatively low 28.932 million barrels as of April 10. That was down from 29.414 million barrels a week earlier and 29.252 million barrels on April 12, 1991, API said.

* Foreign political problems. They have made petroleum speculators concerned that crude exports onto world markets could be interrupted from Algeria, Venezuela and especially Libya, Anton suggested.

World crude prices spurted on fears Libya might halt its exports of 1.3 million barrels daily, he said, in retaliation against a United Nations Security Council threat of sanctions against the North African nation (a threat made good last week). Sanctions were threatened because Libya refused to surrender two of its nationals to either the U.S. or United Kingdom, which had indicted the pair for their alleged roles in the bombing of Pan American Flight 103 over Scotland.

Anton said he personally believed Libya would continue to export oil. While Moammar Gadhafi, Libya's dictator, certainly is no expert in capitalistic free markets, he realizes it now is very hard and takes awhile to recover surrendered markets, Anton explained.

Another reason for spurting petroleum prices, Anton continued, is that Iraqi exports still had not resumed, which was contrary to some expectations that 500,000 barrels daily would have been moving through the Persian Gulf by then. The UN had refused to permit such exports until its demands regarding missile destruction and other weaponry were satisfied by Iraq's government, led by its dictator, Saddam Hussein.

Besides exports through the Persian Gulf, Anton said, Iraq could export a million barrels daily via lands controlled by the rebellious Kurds into Turkey. However, he commented, that would require Hussein's making peace with the Kurds, something the dictator has continued to resist.

Summing up, Anton said that excluding some political upheaval, he expected crude prices probably would stay the same for a while.

Gasoline prices in L.A. County, though, were expected to continue edging up until West Coast gasoline inventories climbed "back into the 30s (more than 30 million barrels) from the high 20s," said Jim Wampner. The manager of volume planning at L.A.-based Atlantic Richfield Co. said regular unleaded gasoline prices had spurted higher by 4 cents to a nickel a gallon during the last 30 to 40 days.

That raised Arco's unleaded regular gasoline to generally $1.099 a gallon last week at retail pumps throughout much of L.A. Jet and diesel had climbed significantly, too, Wampner noted.

However, the spread between regular and premium gasolines actually widened during the same period to 8 cents a gallon from the former nickel a gallon, Wampner related. He ascribed this widening to an "octane shortage."

Tightened restrictions imposed by tougher environmental requirements on gasoline's Reid vapor pressure here have reduced the amount of butane that may be blended to manufacture gasoline, Wampner said. That has put a "squeeze on things," he said, because other methods to increase octane ratings of gasoline are more costly than blending more butane, which is a volatile liquefied petroleum gas.

No doubt about it, chimed in a Unocal spokesman, tougher RVP requirements have caused gasoline production problems and tightened supplies at a time when spurting crude prices were hiking refiners' costs.

In fact, according to API's latest figures last week, West Coast refineries' output of motor gasoline slipped to 1.192 million barrels daily in the week ended April 10 from the prior week's 1.231 million barrels daily. This occurred even though West Coast refineries stepped up their crude runs to processing units to 2.404 million barrels daily from 2.397 million barrels daily in the same respective periods, according to API figures.