Last week’s jump in futures prices looks like a temporary spike, as oil is getting close to $35 a barrel. Of course, that just gets us back to where we were a few weeks ago. If retail prices continue dropping to $1.64 or lower, expect a price hike on or about Thursday to at most $1.79, since it seems that when the range of prices gets too much in town, that’s when the price hike occurs. On the other hand, if prices are steady the next few days, I don’t think they’ll raise prices. On Wednesday, prices got down to $1.68 and then rose to $1.84 all over town. Do I get partial credit for having the amount of the price hike (16 cents) to within a penny? No, I don’t. WRONG.
Month: March 2004
We have the recipe for a price hike this week. Futures up again last week (oil at $38 a barrel), wide range of prices around Grand Rapids (from $1.63 to $1.77), and continued global unrest. I don’t know when the price hike will occur this week, but I predict we break the $1.79 ceiling we’ve been bumping against for a while, with a new price above $1.81. Prices rose to $1.83 on Tuesday the 23rd, so that was a CORRECT prediction.
I’m posting today because there is a lot of weirdness going on. Tuesday’s price hike to $1.79 has apparently not been matched by everyone, particularly along Michigan Avenue, and the Speedway there is already down to $1.69. The US Dept. of Energy reports on the “This Week in Gasoline” website that last week Midwest gas prices were on average six cents *lower* than on the East Coast. Then there was yesterday’s action in the futures markets in New York, where wholesale prices rose to a 13-year high, with oil over $38 a barrel. It doesn’t quite all add up to me right now, which means we should just keep a close eye on everything.
I don’t have my NCAA bracket filled out yet, but a price hike this week is certain, as retail prices have fallen into the $1.50’s, but wholesale prices have not fallen much. I suspect the price hike will be sooner than Thursday, somewhere in the vicinity of $1.79. On Tuesday, prices rose to $1.79, so the prediction was dead-on CORRECT.
Lately, I find I need to wait until Tuesday or Wednesday to get a better picture of what is going on. So far this week, the futures have backed off a bit, but this morning they are up again, and again we are looking at $1.79 as a price target. You know the drill lately, “On Thursday at 11AM, the Speedways will raise their prices to $1.79. That afternoon, other stations will raise there prices, with Admiral going last.” So, why not?! Let’s make that the prediction. I’ll fill up this afternoon. Wow, they left prices alone on Thursday. A very WRONG prediction.
A trip to the Flint/Saginaw area over the weekend indicated similar prices to Grand Rapids, so we are all in this together. Also over the weekend, I read in Barron’s predictions of $2.25 for gas this summer. As far as I am concerned, it is way too early to make that conclusion, but how about this one — in the nearly three years I’ve been tracking wholesale prices, I’ve never seen them as high as they were at Monday’s close. With the 20-cent margin, retail prices land at $1.83, and we still have our working hypothesis that a push is on to change that margin to 25 cents. The upshot is a price hike this week, to at least $1.83, and maybe higher. The prediction that prices would rise was CORRECT, as the new price last Thursday was $1.79 — again! So I was WRONG about the price. And, given the way prices have gone lately, the prediction of a price hike was a pretty safe one.