Comment on the March 18 prediction: Prices are lower, but in some place not by much. $1.54 in Grand Haven last weekend!
Thursday, March 26, 2020, 8:00PM: I think when it comes to gas prices lately, we have to use garage sale economics. How many readers have had a Fri-Sat garage sale, and by noon Saturday, no one is stopping to see what you still have. At that point, you may be tempted to put out the “all items 25%” sign, but it doesn’t help, because there are no customers. So, you might be better off leaving the prices whole, just in case someone arrives to look. I suspect many gas retailers are doing the same thing. The stations I track on Lake Michigan Drive were stuck at $1.94 for almost a week, and today are on their second day of $1.85. But the evidence is that they have much fewer customers. No gas war, when wholesale prices are 50 cents cheaper? Garage sale economics may be why.
The easy prediction is still to expect lower prices. But how much lower? -EA
Comment on the March 8 easy prediction: CORRECT — we are under $2 a gallon.
Wednesday, March 18, 2020, 7:30PM: The crash in oil prices has been brutal and severe: from nearly $54 a barrel on February 20 to about $20 today. Two reasons: the Russian/Saudi oil price war, and, of course, the coronavirus pandemic bringing the world economy to a crawl. Gas prices, at least in west Michigan, are still based on the last hike on February 18 ($2.55), and they have a lot of room to fall, like down to $1.29-$1.39 if wholesale prices stay put. So, another easy prediction is to expect lower prices.
Diesel, though, I don’t know. At my target station on Lake Michigan Drive, it has been stuck at $2.65 since February 18. In a Reuters analysis today, “Gasoline prices have fallen further than diesel prices, in the expectation that fewer drivers will be on the roads even if truck deliveries continue.” That’s not convincing — maybe we will wake up soon to see diesel prices have dropped close to $2. -EA
One of the individuals that provides data powering The Spike Line and Today in Oil features is off for a few days. You may not see updates to either of these pages until next week, although if there is data available I’ll see that it is posted. -CP-
Comment on the March 4 prediction: Although we were living in price-hike territory most of the week, we never saw that jump in future prices that would have triggered a hike. WRONG again.
Sunday, March 8, 2020, 7:00PM: We have moved into a time of extremely unstable markets. As I type this, oil futures are down 20+% in Sunday night trading. That could be the panic selling that marks a bottom, or it could be something more ominous. Stock futures aren’t looking so hot, either. It’s like when you are kids playing Monopoly, and your brother is losing and knocks the board off the table. The easy prediction is more and more gas prices below $2, but there is no clue as to when prices will stabilize. -EA
Comment on the February 23 prediction: Completely WRONG, as markets have been falling hard since then, including energy markets.
Wednesday, March 4, 2020, 7:45AM: Sparked by coronavirus fears, energy markets have fallen 10% in the past two weeks, mirroring a similar move in stocks. Retail gas prices have followed, and I think we are at a point where Big Red and friends are looking for an excuse to re-set and clean up prices. This morning, in west Michigan alone, we have a wide range of prices, from about $2 to the $2.40’s. With futures signaling a stock price rally this morning, I would not be surprised if energy prices followed, and then we get the re-set in the neighborhood of $2.39. Today, tomorrow, or Friday. -EA
Comment on the February 2 prediction: Prices continued to fall that week, although I don’t think we got to $1.99. Basically CORRECT. Then we say a pair of hikes the past two weeks.
Sunday, February 23, 2020, 2PM: Prices rose to $2.55 in Michigan last Tuesday (February 18), but that hike seemed fishy. Yes, markets were suggesting over the President’s Day weekend that higher energy prices were in the works, but not with the vigor that justified a hike. It felt like someone at Speedway was overreacting, and given that we are already back in the $2.30’s around west Michigan, it does seem like it was a premature push of the button.
So, where are we today? I am estimating the 0-margin price in the mid $2.30’s, and this is supposed to be the time of year where retail prices are more buoyant. I’m expecting a price reset this week, in the $2.49-$2.55 range, but probably not on Monday.
Speaking of Speedway, are they for sale? That might shake up the Gas Game! -EA