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.
Month: June 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.
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.
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.
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.
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.