Our Mindset Going Forward: Expect Chaos

Comment on the November 22 prediction:  We didn’t get a hike until Monday the 28th, so the prediction was WRONG.

Sunday, December 4, 2016, 9:00PM:  So, we have a new problem.  The President-Elect is unpredictable and, looking at what he says on Twitter, likes to stir things up.  That will be an on-going contributor to volatility in the markets, so we could get more ups-and-downs than we have the past few years.  With the quiet energy markets of Obama’s second term, we didn’t have to pay as close attention, and it was a easier to make predictions.

We have another new problem.  For the first time in eight years, OPEC has decided to cut oil production.  Just on the news, oil prices rose 10%, and wholesale gas prices are starting to go up, too.  If my calculations are right, we aren’t there yet for a hike on Monday, but I’m expecting one this week.  That’s a prediction.

Also of note:  December is usually the time for the lowest gas prices of the year, but this year that may have happened the Sunday after Thanksgiving.  We’ll see. -EA

Is it time to say “No Thanks” to a price hike?

Comment on the November 1 and 13 predictions:  We got a hike to $2.19, as predicted, so that was CORRECT.  Also CORRECT was part of my November 1 prediction, regarding the stock market.  Did you buy call options?  I forgot.

Tuesday, November 22, 2016, 8:00PM:  Post-election, oil and wholesale gasoline prices fell through Veterans Day, contrary to the stock market.  But last week, we started to see oil perk up, leading to last week’s price hike, but wholesale gas prices continue to rise.  Tonight, by my calculations, the 0-cent margin price is about the same as the retail price in Standale.  That usually triggers a hike, but will they give us a pass until Friday, due to the holiday?  Why gamble … fill up tomorrow morning!  And I’ll predict a hike either Wednesday or Friday. -EA

Big Ten Red States Leads to Red (Lower) Gas Prices

Comment on the November 1 prediction:  Turned out to be a CORRECT prediction, as prices rose on November 2-3.

Sunday, November 13, 2016, 8:00PM:  Yup, volatility.  Stocks rose sharply last week, first thinking Clinton was going to win, then after Trump won.  In the middle of that, on election night, stock futures prices crashed from 9PM until midnight.  By Friday, the Dow had hit an all-time high.  Meanwhile, wholesale gas prices (and gold) got clobbered, and we are seeing retail prices below $2 all over the place, with $1.85 in Lowell.  Will it last?  Probably not, as it looks like $1.85 is below cost for retailers right now, but those stations above $2.10 have move to drop on Monday.  Plan for the week:  keep filling up for under $2, but expect a reset before the week is out.  $2.19? -EA

 

Preparing for Blast Off

Comment on the October 17 prediction:  We saw a lame hike on Monday, October 24, so basically, I was WRONG.

Tuesday, November 1, 2016, 7:00PM:  I haven’t been posting much lately, because gas prices have been incredibly stable.  The stock market has been quiet, and the oil market, and when you get down to it, the median Clinton-Trump polling data.  I think this is all about the change.  Stocks are showing more volatility since Comey Friday, and there are signs of extreme fear in the stock market.  It reminds me of the month before the 2004 election, as the market worked through pre-election confusion for months and then took off the final 2+ months of the year.  I predict a similar track this year, with oil joining in, and hence higher gas prices.  Short-term, with retail prices near or below the 0-cent margin price, I’d fill up on Wednesday for $1.99 when you can find it (south of downtown near US-131 works), and prepare for a hike by the end of the week. -Ed A.

Maybe this will get more interesting after the election

Comment on the October 3 prediction:  It was CORRECT.

Monday, October 17, 2016, 8:30AM:  Although oil has been up this month, gas prices have remained flat.  I suspect that we have some seasonality factors kicking in, as we tend to see lower prices during the latter part of autumn.  Here’s this weekend’s calculation:  Chicago CBOB is about $1.40, and ethanol is about $1.60, with the blend a typical 90/10 split.  Throw in all the taxes, and that puts the 0-margin price at about $2.12.  I saw that price near Holland and Wyoming yesterday, but we still are in the $2.20’s at most stations in the Grand Rapids area.  So, I think we are good for a few days, but I suspect a price reset would come along on Thursday.  That’s a prediction.

Note to “CMU Pitcher”:  the new Michigan gas tax law doesn’t kick in until 2017.  More details as we get closer. — Ed A.

Wholesale Prices Starting to Perk — Retail to Follow

Monday, October 3, 2016, 8:30PM:  Now that I have written in my last post about “nothing-burgers since July”, volatility is starting to perk up in the energy markets.  Oil is up 10% over the past two weeks, and wholesale gas prices have followed.  I’m calculating negative margins tonight, which almost always signals a price hike is coming up pretty quick.  Looking for $2.39-$2.49 as soon as Tuesday. –Ed A.

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