For a period in March and early April, sustained higher wholesale prices did attract incremental imports to the West Coast, which provided some relief. However, persistently low refinery runs eventually translated into several weeks of inventory draws, which left PADD 5 gasoline inventories at 24.1 million barrels on May 18, about 5.1 million barrels (17 percent) below typical levels for that date, the lowest for the region since March 1999. The situation culminated the week of May 7, when market expectations of a Cherry Point restart were quashed as the restart encountered problems and had to be halted. Wholesale gasoline prices in Los Angeles shot up about 30 cents per gallon over the course of the week, and even more in Pacific Northwest markets, pushing the West Coast average retail price for a gallon of regular gasoline up to a 2012 high of $4.26 per gallon on May 14.
Gasoline prices on the West Coast, however, appear to be moderating. With widespread reports that the restart of the Cherry Point refinery is imminent, there has been a sharp reversal in West Coast wholesale prices over the last week. That change is starting to be reflected in retail prices. The average price for regular gasoline on the West Coast fell two cents per gallon last week to $4.24 per gallon on May 21. Experience suggests wholesale price changes tend to be fully passed through to retail prices over the course of about six weeks. This means if the wholesale market in PADD 5 is not subject to new disruptions, retail prices should see continuing downward movement in the coming weeks.