I am going to start using the “This Week in Gasoline” site to estimate what needs to be added or subtracted from NYMEX prices to get the wholesale price for the Midwest. Over the past few weeks, that site has reported a six-cent difference in prices between there and here, and that has worked out perfectly for a “Chicago Winter Discount.” Last Monday, that difference was reported as three cents. So, putting it all into the formula (with SG=-3), we get a 20-cent margin price of $1.57. Given where prices are right now (low $1.40’s), I’d expect a price hike, perhaps as early as Monday, to around $1.57. On Tuesday, the price hiked … to $1.57! Very CORRECT!
Month: December 2003
I’m a little baffled at the variation of prices I saw around town this weekend. While some places held up the $1.54 price all weekend, down on 44th street, a gallon of gas could be had for $1.44. Still, with futures prices declining lately, I think we’ll get a Christmas present and no price hike this week. As for early next week … It was a merry Christmas, with no price hike … CORRECT.
Family matters have kept me away from the Gas Game lately. For those of you playing at home, you should be noticing a discrepancy between the expected gas price, using the NYMEX futures, and what has been happening in Grand Rapids, in that gas has been CHEAPER than expected in GR. My theory is that this pending change in NY and Connecticut, where MTBE gasoline will be banned as of January 1, is causing prices there to go up now. This is confirmed by this data from the Department of Energy. Consequently, we currently have a “Chicago Winter Discount” of about 6 cents it looks like. Here’s what I think happens this week: Price hike to $1.54. Well, couldn’t be more CORRECT than that!
Wholesale prices were up sharply on Tuesday, so expect a price hike today or tomorrow. The new price will be at or near $1.53. Prices rose to $1.49 on Thursday, December 4, so the prediction was CORRECT. After drifting lower in Standale, and dropping hard elsewhere, prices reset to $1.49 again on Thursday, December 11.