Wires

UPDATE 1-Californians hit with unprecedented gasoline price jump

(Recasts lead, adds AAA spokeswoman quote, gas stations requestto sell winter blend early)

By Braden Reddall and Nichola Groom

SAN FRANCISCO/LOS ANGELES, Oct 5 (Reuters) - Californiansawoke on Friday to yet another unprecedented spike in the priceof gasoline that brought the one-week increase in the GoldenState to a whopping 36 cents a gallon.

Prices dropped, however, on the wholesale market, possiblysignaling the end to a price spike that has blindsided thestate's car-loving consumers.

"It's insane," said Matt Hurd, 35, as he filled up at a SanFrancisco gas station near the Bay Bridge. "Especially with thisthing," Hurd, who works in real estate, added, motioning towardhis white SUV. "It's going to cost triple digits to fill it up."

The average retail price of gasoline rose 17 cents to $4.486on Friday morning. The average price was $4.315 on Thursday and$4.131 a week ago, according to AAA data.

"We're in brand new territory," said Marie Montgomery, aspokeswoman for the Auto Club of Southern California. "It alwaysseems like just when you've seen everything and you can't beshocked anymore, you are shocked again."

The average price is just 12 cents below the highestrecorded statewide price of $4.61, which was reached in June of2008.

In recent weeks, California refineries have droppedproduction in anticipation of switching over to a "winter blend"of gasoline next month.

At the same time, a power outage at Exxon Mobil Corp's

Torrance, California refinery on Monday and a shutdownof the crude distillation unit at Chevron Corp's

Richmond, California refinery aggravated the tight supplies.

Phillips 66

also said a planned maintenance wasunderway at its 120,200 barrel-per-day (bpd) San Francisco-areaRodeo refinery.

Western U.S. refiner Tesoro Corp

halted sales onMonday to retailers that do not carry its brand name, accordingto market sources. Tesoro declined to discuss its wholesaleoperations.

Finally, Chevron said a pipeline that carries crude oil fromthe state's Central Valley to refineries in the San FranciscoBay area has been closed since mid-September.

"STARTING TO IMPROVE"

On Thursday, Golden State gas station operators asked airquality regulator the California Air Resources Board to allowearly sale of winter-blend gasoline, the California EnergyCommission said.

Gas stations in the nation's most populous state can beginselling winter-blend gasoline, which more easily releasessmog-causing substances, on Nov. 1. Until that date, onlysummer-blend gasoline, which is less likely to evaporate intosmog causing chemicals, can be sold.

Some of the state's gas stations shut down due to tightsupplies. About 14 of Costco Wholesale Corp's

40 LosAngeles-area stations were closed, according to Chief FinancialOfficer Richard Galanti, who added that five of those wereexpected to reopen on Friday.

"The situation is starting to improve already," he said.

In recent weeks, California refineries have droppedproduction in anticipation of switching over to a "winter blend"of gasoline next month.

In the Los Angeles area on Friday, the average price climbed19 cents to $4.539 from $4.347 a day earlier. In San Francisco,prices climbed 16 cents overnight to $4.596.

But the differential for wholesale gasoline fell 55 cents onFriday in the Los Angeles spot market, according to a West Coastrefined products trader said.

Gasoline blended to meet California's strict environmentalstandards traded at 90 cents a gallon over the November RBOBcontract on the New York Mercantile Exchange, down 55 cents fromwhere it traded on Thursday. California gasoline was lateroffered at 85 cents over the NYMEX.

"The squeeze is over, I guess," the trader said.

(Additional reporting by Erwin Seba in Houston; Editing byLeslie Gevirtz and Sofina Mirza-Reid)

((nichola.groom@thomsonreuters.com))

Keywords: CALIFORNIA GASPRICES/