Comment on my September 14 prediction: Seeing how we saw hikes across the board on Wednesday, September 16, the prediction was WRONG.
Tuesday, September 29, 2015, 9:15PM: I’ve been reading a bit this week about Glencore, a giant commodities trading firm that has been falling apart this summer. This company is an example of the kind of speculators that play havoc with the oil and other markets, and there is some evidence that the collapse in oil prices (and lately some stock markets) may be connected to some of their failed trades. That Glencore is starting to percolate in the media (my favorite quip is “You can’t spell Glencore without Enron“), I am starting to wonder if this is the beginning of the end of the bear market in oil. In fact, oil prices hit their low of the year on August 24 and have been slowly rising since. Gas prices started turning around on September 16, and now there are hints of another price hike in the works. Estimating a price-to-retailers of $2.37 a gallon, and with prices as low as $2.31 in the Grand Rapids area, I smell a hike coming on Wednesday or Thursday. $2.59 a gallon?
Comment on September 14 prediction: Correct. Indiana and Michigan spiked on September 16 with Ohio following on September 17.
Monday, September 21, 2015, 11:10 PM: Decent sized jump in wholesale today puts us back in the danger zone. Ohio is still slightly above the Spike Line, but Indiana and Michigan have headed below it with today’s increase. I’m looking for a Spike as soon as tomorrow to the $2.39 – $2.49 range for the Great Lakes region. Ohio may go a day later than Indiana and Michigan, but I wouldn’t chance it if I were you.
Monday, September 14, 2015, 2:30PM: I know, it has been too long since my last post, but what I am supposed to post everyday — “Expect prices to fall?” What a crazy time it has been, as prices soared on August 12 and have been in free-fall for a month. Here’s the current setup: based on a midday quote of Chicago CBOB to $1.38 a gallon, I estimate the price-to-retailers to be about $2 a gallon here in Michigan. We are down to $2.07 in Sparta today, and $2.29 in a lot of places, so we *still have room to fall*. I know there are $1.99s and lower elsewhere in the Big Ten region — let’s see it here in the Grand Rapids area! Looking ahead, we could see some volatility later this week, due to the Federal Reserve meeting, and that could lead to a price reset at the end of the week. But it is too early to say, and we should be safe through at least Wednesday. — Ed A.
Comment on the July 22 prediction: No, they didn’t reset the system until the beginning of August, so WRONG.
Thursday, August 20, 2015, 11:15AM: So, I take a few weeks off for some academic travel and some relaxing and everything goes crazy. Why are we so vulnerable to the refinery in Whiting? Just to show you how crazy it was last week, here are two screenshots from Speedway’s web site on August 11 and 12, from a station in Fort Wayne. The nice thing: with a Speedy Rewards card, they gave you the pre-hike price for the rest of the day. Do they do that in Michigan?
Now, what’s next? Since the Uber-like “surge pricing” last week, Chicago CBOB has gone from $2.51 to $1.96, and I bet it is lower today. Oil prices are in free-fall again, down near $40 a barrel. And those $2.95’s I see around the Grand Rapids area look rich given the CBOB price. (I see we are down to $2.82 in Kentwood as I write this.) So, expect prices to keep falling, probably through the end of August. I’m not going to be in a hurry to fill up. — Ed A.
When I agreed to contribute here, I said, “Sure, I can write an post a week!” The market is pushing me towards a daily contribution. The loss of the crude distillation unit at BP Whiting has wreaked havoc on the Midwest markets. As of this post, Chicago CBOB was up 60 cents and RBOB was up 65 cents. Without some crazy market reverses, I don’t see how we will avoid another price hike this week. A simple addition of today’s market increases and today’s spike prices across the Great Lakes region puts us above the $3 mark. If you haven’t topped off yet, today’s spike price may start to look pretty good by mid-morning tomorrow. -TS
Greetings, everybody. I’m the new guy, Tim. I was recently been asked by TheGasGame to join their group and help out with contributions on gas prices from the Great State of Ohio. I have been tracking gasoline prices in Ohio for several years using the model developed by TheGasGame. I do my best to help people time their gasoline purchase and save money. It’s a real honor to have been invited by Patrick, Ed, and Bill to write here. I look forward to sharing my perspective with you all and hearing back from you, as well. That’s the good news.
The bad news is that there’s been a large jump in the Chicago CBOB price today. It’s the result of a downed crude distillation unit locate at BP Whiting – one of the largest refineries in the Midwest. CBOB closed UP 28 cents a gallon and RBOB is UP 23 cents a gallon. These new spot prices look to put Indiana under the Spike Line and take a big bite out of the margins in Ohio and Michigan. It’s uncommon for such a large jump to go unnoticed by our friends in Enon, OH. Be prepared for a price hike tomorrow. -TS