Oil and gas futures prices bottomed out on 3/21, and they climbed all last week. With a 20-cent markup, the price of gas comes in around $1.59, so expect a price hike this week, probably Tuesday, to near that price. Price rose last Monday to $1.66, so I was more-or-less CORRECT. Then, they drifted lower.
Month: March 2003
Oil and gas futures plunged last week, as the war with Iraq got started. The drop in the futures corresponds to a 30-cent drop in retail price. Based on closing prices on Friday, the retail price, with no profit to the retailer, would be $1.30, and with their usual midweek-price-reset profit, is about $1.51. So, clearly, prices, which fell a lot last week, should fall further this week, with no price hike. However, the progress of the war may throw this prediction into jeopardy. (That’s my way of being a weasel, if necessary!) There was no price hike last week, so I was CORRECT, although not with 100% certainty.
Late last week, gas and oil futures fell by 10%. This drop ought to be passed along to customers this week. Except, of course, that the war with Iraq will be starting this week. And what was with that unusual price action at the pumps late last week? Put it all together, and when it comes to predicting what will happen to retail gas prices this week, here’s a big “I just don’t know.” Just to be safe, I just filled up my tank for $1.72 a gallon. Prices dropped all week.
Wow, another move up in oil and gasoline futures late last week. Combine that with some sort of Chicago premium this winter, and a certain red-tinged retailer’s aggressive maintenance of their margins lately, and that means another price hike this week, to $1.89. I imagine this will happen on Tuesday, again. (The only time in my memory that gas was this price was the night of 9/11/2001.) Well, I was about 1/4 CORRECT and 3/4 WRONG. Prices didn’t go up until Thursday, and then only to $1.79, and then only at certain stations. By Saturday, prices were $1.72 again in Standale.
My first instinct on Monday was to not make a prediction for the week. Between the volatile future markets, some question about whether prices are higer in the Midwest, and the continuing war vigil, that would have been the conservative thing to do. But, no, I needed to make a prediction. And I was wrong. So, now what? Well, don’t be surprised if gas prices fall very little this week. Other than that, let’s wait and see.
I found last week to be rather confusing. Why did prices go all the way back to $1.79? Why did prices go back down on Thursday, at least on the north side of town? My calculations say $1.69 with a 20-cent margin, and a $1.50 with no margin, and since we are close to $1.69, there should be no price hike this week. That would be WRONG, as the price hiked to $1.80 in Standale on Tuesday.