The Pleasure and Pain of Being California, the World’s 5th-Largest Economy

Gas prices are still a long ways off from when they reached as high as $4.11 in 2008. And demand hit its highest levels ever last year even as prices rose.
“It’s not only the price point, but it’s how long that price point stays,” Karl Fails, chief commercial officer at Sunoco LP, a wholesale fuel distributor, said during an earnings call Thursday. “We’re very comfortable with the U.S. economy right now. And I think that will also have a bearing on any demand impacts.”
Factors outside the U.S. are pushing oil prices higher. The Organization of the Petroleum Exporting Countries, along with other major oil producers including Russia, agreed in 2016 to curb output in the hopes of eliminating a global glut. Their efforts have been helped by a steep decline in production in Venezuela as the country has fallen into political and economic turmoil.
Airlines and shipping companies will also be paying more for jet fuel and diesel—costs that may be passed along to consumers. Even companies such as Whirlpool Corp. have noted that higher oil prices have boosted the cost of materials.
Robert Lozano, a car salesman in Los Angeles where some gas prices are already above $4, said the dealership’s gas bill has climbed from about $9,000 to about $12,000 a month recently.
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