Even Trump Can’t Save It! California Gas Prices Surge Dramatically Amid Recent Spike

While gasoline prices across the U.S. are falling, California’s prices have surged sharply over the past two weeks—rising nearly 40 cents per gallon. The state’s average now stands at $4.582 per gallon, far exceeding the national average and sparking widespread concern among residents and industry stakeholders. The root cause lies primarily in California’s hostile stance toward traditional energy industries—ostensibly to promote so-called ‘new energy’—and its numerous stringent environmental regulations, which have made it difficult for refineries to upgrade equipment, forcing many to shut down. Between 2025 and 2026, Phillips 66’s refinery in the Los Angeles area and Valero’s refinery in Benicia both ceased operations. Today, 70% of California’s finished petroleum products are imported. Costco’s gasoline prices will also surpass $4.00 per gallon. According to the latest data from the American Automobile Association (AAA), as of February 15, 2026, California’s average regular gasoline price stood at $4.582 per gallon—up about 12 cents from $4.463 a week earlier, and up a full 40 cents from $4.182 fourteen days prior. This upward trend has persisted for multiple consecutive days, marking the 14th straight day of price increases. In Bay Area cities such as San Francisco and San Rafael, 87-octane gasoline has already exceeded $4.80 per gallon—among the highest in the state. Meanwhile, the national average gasoline price is only about $2.93 per gallon—over $1.50 lower than California’s, and the gap continues to widen. Causes Successive refinery shutdowns in California This round of price surges stems directly from a sharp contraction in California’s refining capacity. A key supplier in Northern California—the Valero refinery in Benicia—has begun phasing out production. With a daily capacity of approximately 145,000 barrels, this facility supplied roughly 9–10% of California’s gasoline. As early as April 2025, Valero notified the California Energy Commission of its plan to idle, reconfigure, or cease refining operations by the end of April 2026. Currently, some processing units at the facility have been idled since late January 2026; thermal imaging shows no heat emissions, indicating significantly reduced production. The company states it will rely on existing inventories and imported fuel to maintain supply through April—but local refining capacity has clearly weakened. Earlier, Phillips 66’s Los Angeles-area refinery closed at the end of 2025, further cutting in-state capacity. Together, these two refineries accounted for roughly 17% of California’s refining capacity and 11% of the West Coast’s (PADD 5) capacity. California’s limited logistical connectivity with other regions—such as the Gulf Coast—makes it difficult to quickly fill supply gaps, causing shortages to be directly transmitted to retail outlets. Energy expert Michael Ariza (former Valero executive) stated: “Valero’s shutdown impacts the Bay Area more severely. Of the five refineries currently operating in the Bay Area, only two—ConocoPhillips in Rodeo and Marathon Petroleum in Martinez—still produce gasoline, jet fuel, and propane. The others have largely shifted to biodiesel production.” Commercial Promotion “Cutting Off One’s Own Limb” Today, finished petroleum products rely entirely on imports. The successive closures of California’s refineries stem directly from the fact that the mature traditional energy system obstructs the Democratic Party’s push for so-called ‘new energy’ in California—thus necessitating various measures to suppress traditional energy development, with ‘environmental protection’ serving as a politically convenient, yet highly contentious, banner.

Morning Market Snapshot: January 29, 2026

1. Last Friday, inventory of the five major steel products rose 0.81% week-on-week to 12.5708 million tons; output edged up 0.05% week-on-week; apparent demand declined 2.01% week-on-week to 8.0952 million tons. Specifically: rebar output and inventory both rose, while apparent demand fell 2.53% week-on-week; wire rod output and inventory both increased, while apparent demand rose 3.84% week-on-week; hot-rolled coil, cold-rolled coil, and medium-thick plate output all declined, and their respective apparent demands also fell week-on-week. 2. Overall, output of the five major steel products remains stable, apparent demand has softened, and inventory accumulation continues—indicating persistently weak supply-demand fundamentals. Structural contradictions remain mild, and market drivers are weak. A sustained directional trend is unlikely before the Lunar New Year holiday; steel prices are expected to trade sideways. Meanwhile, ironwater output may remain elevated, but off-season downstream demand may struggle to absorb supply—raising the risk of further inventory buildup. Traders should remain vigilant against sentiment-driven volatility triggered by market rumors and consider opportunities to add short positions. Market Outlook: Broad-range sideways trading Soda Ash & Float Glass Key Information: 1. During last night’s trading session, the main soda ash futures contract (2605) rose 1.59%, closing at 1,212; spot prices remained broadly stable. The main float glass futures contract (2605) rose 0.75%, closing at 1,076; the Sandhe large-panel price stood at 932, while Hubei’s lowest spot price was 1,060—indicating modest upward adjustments in spot pricing. Core Logic: 1. For soda ash, current fundamentals show recovering production lines and weekly output, alongside continued inventory drawdown—suggesting short-term improvement in downstream demand. However, the medium-to-long-term outlook remains one of oversupply relative to demand, resulting in ongoing fundamental pressure. For float glass, weekly output dipped slightly, while inventory continued to accumulate; short-term sales-to-production ratios remain weak, and fundamentals continue to reflect weak demand and weak supply—exerting downward pressure on prices. 2. Upside drivers center mainly on valuation: first, a broad-based rebound in commodity or chemical-sector valuations; second, cost support—i.e., losses prompting furnace cold shutdowns, followed by production cuts, supply-demand rebalancing, and price stabilization. A near-term rebound in the chemical index is supporting soda ash and float glass prices. 3. Soda ash may be experiencing pre-holiday restocking, providing some short-term boost to sales and production. Yet this restocking is merely a transient driver; upstream producers still face significant inventory drawdown pressure, limiting upside potential. 4. The core issue for float glass remains the near-month vs. far-month price spread: the 03–05 spread continues weakening, signaling renewed market momentum and greater premium for far-month contracts—potentially reverting to a pattern of weak fundamentals coupled with strong forward expectations. Market Outlook: Current fundamentals weigh on prices, while forward expectations provide support—overall, a relatively weak market structure prevails. Crude Oil Key News: 1. Affected by a cold snap, ExxonMobil announced in a statement that it would shut down part of its Baytown refinery in Texas due to freezing weather. This facility—one of the largest fuel production sites in the U.S.—is located 30 miles east of downtown Houston. Core Logic: 1. Geopolitical tensions combined with the U.S. cold snap have pushed crude oil prices higher. Ongoing geopolitical conflicts remain unresolved and highly uncertain—likely increasing crude oil price volatility. 2. The structural oversupply in crude oil markets persists: U.S. refinery utilization rates are seasonally declining, and global crude inventories remain elevated—keeping supply-demand fundamentals soft. Market Outlook: Supply disruptions may support short-term strength in crude oil prices. PTA Core Logic: 1. Severe cold weather is boosting demand for distillate fuels, while geopolitical uncertainty continues to underpin oil prices. According to Jinkelian Consulting, Trump’s cancellation of tariffs on eight European countries has significantly eased trade tensions.

Valero to Buy, Restart Idled Texas Refinery as Fuel Rallies

1 day ago

Valero Energy plans to acquire and restart an idled Houston refinery from LyondellBasell by 2027, adding 165,000 barrels per day capacity amid soaring fuel profits driven by global conflicts.

bloomberg

2026-04-30

Valero Energy Beats Profit Estimates on Strong Refining Performance

2026-07-30

Valero Energy beats quarterly profit estimates on higher refining margins

2026-10-22

US refiner Valero posts record quarterly profit as supply disruptions boost margins

2026-10-22

Valero Sees Fuel Margins Rising Again Despite Price-Cut Efforts

2026-10-30

Valero to Buy, Restart Idled Texas Refinery as Fuel Rallies

Valero to Buy, Restart Idled Texas Refinery as Fuel Rallies

FAQ