The Gas Game Welcome Guest | Login or Register

After fielding through a few phone calls and seeing a news spot on Channel 8 “Gas Surprise” I wasn’t sure what to expect this morning. I logged on Channel 8’s site to try and find a gas story to see if I had missed something. Not really.

I then had a few text messages asking if gas was going up today, some sort of rumor? Well its not.

However, I believe with today’s news (Goldman Sachs upping oil forecast for 3Q&4Q to $141, China needing Diesel for recovery efforts) that we’ll see record oil prices (already over $127). Gasoline and diesel/heating oil are already way up, gasoline up 7 cents and diesel up 8 cents.

As long as these price increases stick tonight, I’m confident we’ll see $4.05-$4.15 come Monday (or as late as Tuesday if stations want to lose money), so MAKE SURE YOU’RE FULL on Sunday night.

Diesel will continue its climb to near $5 on this news and global supply worries, and I really don’t see an end in sight.

The pain at the pump continues.

Patrick

Bookmark to:

Hide Sites

As Speedway hikes to the predicted $3.999 this morning, I was busy looking at markets to see what’s going to happen next.

Unfortunately, it looks like things still aren’t as bad as they will get. I expect gasoline to crest $4 in the next week or two, and diesel prices look like they will accelerate toward $5 as global demand continues to cause supply worries. I expect diesel to hit $4.75 and rise as high as $5 here in the Grand Rapids area before moderating into the beginning of summer.

There isn’t much you can do except to park the car for a while or to trade in the gas guzzler. We’re in a period of sustained higher prices. Don’t expect prices to get back into comfortable territory for quite some time.

For the immediate future the outlook is: higher prices until early June, some moderating towards July, and a pickup in prices in mid-August as Hurricane season arrives. Hurricane forecasts can and will greatly effect pricing, so stay tuned to those forecasts.

Patrick

Bookmark to:

Hide Sites

Comment on the April 30th posting:  There was a hike last week to $3.89, so any brave predictions that $3.75 was the high for the year was dead WRONG.

Saturday, May 10, 2008, 4:45 PM:  My previous prediction was based on the observation that metals had stopped going up and agricultural products had stopped going up, so now it was energy’s turn.  Nope.  You know, though, this is what happens at the end of a big run up — instead of 50 or 100 things going up, only 2 or 3 do, until the impulse to buy disappears.  At some point soon, that will happen with oil and gas, and there will be a day when the wholesale price drops 10% in one day, and at that point the fever breaks.  But I have no idea when that will happen, and the way wholesale prices continued to climb through Friday was scary.  NYMEX prices are up 10 cents since Tuesday, putting the 20-cent margin price at $4.01, and NYMEX is working better than AXXIS for predictions right now.  So, the scene is set for a hike this coming week to $3.999 a gallon.  Ugh!!!!

Bookmark to:

Hide Sites

As you may or may not know, last night a Citgo station in Kentwood (52nd and Kalamazoo) was priced at $3.87 on the street. However, once at the pump, customers noticed the $2.87 and greedily filled up without saying one word to the station’s employees.

It is appalling to me that this went on for nearly four hours while the station owner (NOT BIG OIL) lost thousands of dollars.

For those who don’t know, the station owner paid Big Oil $3.65 per gallon for the gasoline and WILL STAND TO LOSE the difference between the $2.87 and $3.89.

It is frustrating that every single one of the idiots who paid $2.87 lacked the ethics to tell the station employees what was going on.
I guess I can understand how other countries view us, heck, even I understand.

And back to the basis: BIG OIL STILL WON, SMALL INDEPENDENT RETAILER LOST.

Patrick

Bookmark to:

Hide Sites

Unbelievable turn of events for diesel and heating oil today.

While I noticed yesterday that heating oil prices were up nearly double they should be, I read that diesel is what is currently driving refiners to refine more fuels.

Right now, the profit for refining oil into heating oil/diesel is way more than the profit for gasoline. Overall, the crack spread, or profit of refining one barrel of oil is $13.18, thanks largely to the 40 cent premium heating oil is over gasoline.

Part of this run-up in heating oil may be largely due to the fact that the U.S. Northeast will be colder than average for at least two more weeks into April, putting more strain on truckers who also rely on the diesel fuel, which is also used for heating oil.

Unfortunately this means truckers can expect to pay at least 20 cents more per gallon in the coming days, with prices in Grand Rapids for diesel approaching $4.50/gallon.

Time to go get a moped?
I think so.

Patrick

Bookmark to:

Hide Sites

Today:

The shocker from a few months ago:

Now, dare I say I could get gas and dine out for the same price as getting gas today?

Sorry to put you all through the pain.

Patrick

Bookmark to:

Hide Sites