Local prices of crude oil reverse course, taking pump prices down.

Reversing the four-month uptrend since March, posted prices headed down last month for crude oil produced in Los Angeles County and for gasoline at retail stations around the county -- unusual for this time of year.

That, of course, is good news for local motorists and truckers but bad news for petroleum producers, gasoline marketers and thousands of Angelenos with stakes in L.A.-area oil wells.

L.A.-based Unocal Corp., for example, lopped its posted prices for West Coast crudes by 50 cents a barrel across the board effective July 31, and local gas stations cut their pump prices a couple cents a gallon. Regular unleaded 87-octane gasoline was being retailed for $1.239 to $1.259 a gallon by last midweek at many L.A.-area Arco and Unocal self-serve stations -- two cents below their prices of $1.259 to $1.279 a week earlier.

Spot prices for gasoline by last week had fallen about a dime a gallon to 62 cents from the low 70s in June, observed Jim Wampner, manager of volume planning at L.A.-based Atlantic Richfield Co. (A "spot price" is the wholesale market price of something at the present "spot" in time, as opposed to a "futures price," which refers to the price of something at some future time.)

Local retailers, Wampner said, had been "crawling and scraping" to hold onto every tenth of a cent, but supply and demand finally forced down retail pump prices.

The inventory of West Coast gasoline climbed to 31.42 million barrels on July 31, according to the weekly report last week by American Petroleum Institute, up from 30.38 million barrels on July 24, and 30.29 million barrels Aug. 2, 1991. Thus, gasoline stocks rose nearly a million barrels from a week earlier and more than a million barrels from a year earlier as demand continued to slip, Arco's Wampner said.

This time of year, he said, demand normally holds up because of the heavy summer driving season. Wampner conceded, however, that he now expects the demand for gasoline to continue to slip, which will lead to "gradual erosion" of gasoline prices.

That, he said, is because he sees nothing on the horizon to bolster demand or cut supply, short of a shutdown of a West Coast refinery. Gasoline output by West Coast refiners climbed to 1.32 million barrels daily in the week ended July 31, according to the latest API report, up from 1.29 million barrels daily the prior week.

Meanwhile, just as the amount of on-hand West Coast gasoline has risen, so too has the amount of West Coast crude on hand, API reported last week. The stock of West Coast crude stood at 70.19 million barrels on July 31, up from 67.76 million barrels the prior week. That pretty well put the capper on posted prices for L.A.-area crudes.

As noted, posted prices for crude produced in L.A. County began to spurt last March. Unocal, for example, hiked its posted prices by 50 cents a barrel March 11, the first of 11 consecutive posted price increases through June that aggregated $6.75 a barrel.

The string of Unocal's posted-price increases was broken July 1, though, when the company cut its West Coast posted prices by a half buck a barrel across the board. This trend reversal was confirmed July 31 when Unocal cut its West Coast posted prices by another four bits a barrel, dropping the Wilmington field price to $16.40 and the Long Beach/Signal Hill field price to $18.05.

The rise in West Coast crude stocks contributed to the spurt of crude stocks nationwide -- to 330.21 million barrels at July 31, an increase of 6.28 million barrels over a week earlier, according to API. That increase was greater than anticipated by many analysts who had been projecting prices of $24 to $25 a barrel for the benchmark West Texas Intermediate crude; its futures price eased to $21.31 for December delivery.

The WTI price still could spurt to $24 a barrel if the winter turns colder than normal or if world political problems interfere with foreign crude production, said Albert J. Anton Jr., perhaps the nation's leading petroleum analyst. However, the partner at Carl H. Pforzheimer & Co., a New York brokerage that specializes in petroleum, expressed his doubts about that scenario for this year.

Closer to hand, Anton said, is the projection that OPEC will increase its crude production to average 24.5 million barrels daily this month. That represents an increase of about 500,000 barrels daily above the estimate of an average of about 24 million barrels daily produced in July by the Organization of Petroleum Exporting Countries, he said.

Meanwhile, Anton added, refineries in Europe have curtailed production somewhat because the slack economy there has led to less consumption. And that cutback in refining operations is causing crude inventories to build up.

The former Soviet states constitute a wild card in the oil game, Anton said. Their crude production had been falling rapidly since the breakup of the Soviet Union, but that decline has been tapering off, he said.

Second-quarter production of 9.3 million barrels daily there was projected by Anton, down just a tad from 9.4 million barrels daily in the first quarter. A further slight decline in the second half, he said, is projected to cut full-year production by the former Soviet states to between 9.1 million and 9.2 million barrels daily.

Yet while crude production is slipping there, Anton noted, so is their consumption because of sharply rising crude prices. A barrel of crude in the former Soviet states now has a posted price of about $3.10 a barrel, he said. While that is only a fraction of the $17.40-to-$19.05-a-barrel price Unocal pays for L.A. crude, it represents a steep rise from the 41-cents-a-barrel price of crude in the former Soviet states during the first part of 1992 and 8-cents-a-barrel price in '91. That fast-rising price of crude in the former Soviet states will be hiked to $7 later this year, Anton said.

Those higher prices will provide enough cash for the petroleum industry in the former Soviet states to buy equipment that will enable the crude production there to be increased significantly, Anton said. He estimated Russia alone has 27,000 abandoned wells, many of which are capable of producing again with the right equipment.

So, the former Soviet states, with their vast potential for sharply increased crude production, could change the world petroleum game markedly, Anton said.