Month: June 2004

Wednesday, June 30, 2004:

My crystal ball is very murky about tomorrow, so I’m not going to make a prediction. Here’s what we do know: based on current prices, the 0-cent margin price (with an 8-cent Chicago Summer Premium) is $1.72, and the 20-cent margin price is $1.93. There is at least one station in town selling gas for $1.74, but there are others in the upper $1.80’s. So, if there is a price hike tomorrow, for some stations, it won’t be much. If there isn’t a price hike on Thursday, then there won’t be one on Friday, Saturday, or Sunday either. Since I’m getting low on gas, I will be filling up late today, just to be safe. There was a price hike to $1.89 on Thursday.

Tuesday, June 29, 2004

Yesterday morning I was ready to predict a price hike, but then futures prices of oil and gasoline fell hard yesterday. Based on Monday’s closing prices, the 0-cent margin price (with an 8-cent Chicago Summer Premium) is $1.72. Also on my mind is that gas stations this month seem to have changed their behavior, from aggressive price hikes to aggressive price cutting. Speedway’s new 4% discount for their credit card also makes me wonder if we’ve now entered a more consumer-friendly period. So, I predict no price hike on Tuesday or Wednesday. As to Thursday, with the 4th of July weekend coming up, it seems a natural place for a price hike, but I’m not sure one way or the other about that. CORRECT — no price hike on Tuesday or Wednesday.

Thursday, June 24, 2004

Futures prices have been rising all week, so expect retail prices to only fall slowly over the weekend. Next week, June 30 is a huge day in geo-political and financial circles. This could lead to a spike higher in futures prices, and a nice price hike on Thursday, July 1. I’ll update Monday or Tuesday of next week. “Slowly” depends on where you look. Prices fell about a penny per day in Standale, where I usually observe them, but elsewhere prices fell more aggresively.

Friday, June 18, 2004

Did someone repeal the Chicago Summer Premium? Adding the premium in, and with a 20-cent margin, the retail price becomes $1.99. With stations below $1.80 in town, that’s a recipe for a price hike. Not that I’m complaining about lower prices. Nevertheless, I predict upper $1.90’s everywhere by the end of the day on Monday. The last time retail prices dropped below the 0-cent margin price was more than a year ago. Allowing this to happen again led my latest prediction to be one day early, i.e. WRONG.

Monday, June 14, 2004

With gas prices dropping towards $1.80, it is pretty clear that a price hike is coming this week to the upper $1.90’s. The question is: which day? A little more than half the time, a price hike comes on Thursday, so that’s the most likely candidate. But pay attention if prices are reset on Tuesday or Wednesday. I am stunned by the WRONG-ness of this prediction. No price hike this week?! The set-up was perfect, including an uptick in futures prices. In preparation, I filled the tank for $1.79 Wednesday afternoon.

Thursday, June 10, 2004

Gas for $1.90 was spotted yesterday on Division, while gas and oil future prices have continued to slip, lowering the 0-cent margin price to $1.76 (factoring in a 10-cent Chicago Summer Premium for reformulated gas). Meanwhile, you can buy gas for $2.14 in Ada this morning. Keep June 2004 in mind the next time the discussion comes up about the speed in which retailers pass along wholesale price drops. A price hike to reset prices just doesn’t make any sense to me today. What would make sense is a reset of prices (making the price the same everywhere) to, say, $1.97, but I can’t remember Speedway and others ever doing that. So, I predict prices to continue to go down, albeit slowly, through the weekend. Well, that’s more like it — prices dropped 12 cents in Standale in 3 days. So “slowly” doesn’t apply. So, rate this prediction 1/2 CORRECT, 1/2 WRONG.

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