Gas prices have been drifting lower all week. Today in Standale, they are $1.41. I expected a price hike on Thursday and I filled the tank, but I was wrong. Gasoline futures are a little strange — the August contract is high, but the September contract has been falling. Nevertheless, I see $1.49 in my crystal ball next Wednesday. WRONG! WRONG! WRONG! July was a bad month for prediction.
Today’s price of $1.34 is right in the middle of the range. If there is a price hike soon (or, as I’ve learned, a “price restoration”), it will be to about $1.43. This is a tough call — 50/50 that the price goes up by Thursday. I’m filling up soon, but I also wouldn’t be surprised if prices drift down to $1.28 or so by Sunday. The price restoration was to $1.48. I am adjusting my spreadsheet for a 24-cent margin until further notice.
I am beginning to worry about another price hike next week to $1.61. NYMEX gasoline futures have been rising this week. WRONG — no price hike occurred this week. I have not been very successful lately.
At 8:30 this morning, the Marathon in Standale raised its price from $1.43 to $1.53. I expect others will soon follow, so I filled up down the street for $1.43. I was beginning to worry about the 7/16 prediction last night when I saw gas priced at $1.38 per gallon near Fifth Third Park. Predicting gas prices this summer has been tricky, kind of like figuring out when the stock market will bottom. Recent price behavior suggests that the gas stations, Marathon in particular, are being more aggressive about their margins right now.
Based on recent prices on NYMEX, the 0-cent margin price is $1.21, and the 20-cent margin price is $1.42. With the new “add 10-cents to the NYMEX wholesale price in the summer to get the Chicago price”, the numbers are $1.32 and $1.53. Gas prices are in the $1.40’s this week, so I don’t expect a price hike on Thursday. WRONG!
Prices are going up today. I have found out from a new friend in the gasoline industry that wholesale prices in West Michigan are running 88 to 90 cents, versus 76 to 79 cents in New York. Consequently, my current calculations are off. Yesterday’s prices (approx $1.37) were at the 0-cent-margin.