With the school starting up again, I plan on returning to posting once a week, either Monday or Tuesday. Looking ahead to this week, prices have done a nice job dropping towards that 0-cent margin price, although we still have a way to go to get to $1.67. I don’t think we will get there though before a price hike on Tuesday, Wednesday, or Thursday to about $1.89. We got as low as $1.68 downtown before the hike on Thursday to $1.89. Very CORRECT!
Month: August 2004
I’m back after a trip to Rhode Island, followed by some minor surgery on my nasal passages. While recovering last week, I spent a lot of time watching CNBC and their obsession with the price of oil. It looked to hit $50, but has since backed off to $45.50. Consistent with what I’ve been observing, wholesale and retail gasoline prices have not soared the same way, and it seems that it is the refineries, and maybe the retailers, that are having their profits cut. We’ll assume this will continue for the time being. So, regarding gas prices in Grand Rapids, with the 20-cent margin price (with no Chicago Summer Premium) currently at about $1.96, with $1.85 being the cheapest price in town, and with futures prices falling this week, expect no price hike. There was no price hike last week. CORRECT!
You are probably hearing on the news about oil prices hitting all-time highs. Wholesale and retail gasoline prices aren’t, though. Someone on TV said the gas stations are afraid to raise prices too much — can that be true? Whatever it is, since wholesale gas prices aren’t surging, neither is retail prices. What that means this week is that if there is a price hike, it will go back to $1.99 or so again. I can’t tell if there will be one or not, but I will speculate right now that gas prices won’t go over $2 this month. When there is too much attention to a surging market, in this case oil, it usually starts dropping. We’ll see if I’m right, but I won’t be doing another posting until the end of the month. There was a price hike on August 12, to $1.99, so that prediction was CORRECT. There was another price hike on August 18, to $2.03, so my speculation about staying under $2 was WRONG.
On the chart I keep of gas prices, you can see a definite change in behavior after Memorial Day this summer. Price hikes have been less frequent, and prices have been allowed to drift down into 0-cent margin territory, while the Chicago Summer Premium has disappeared completely. And now, with crude oil trading at an all-time high, the wholesale prices of gasoline has not followed suit — those prices were much higher in May. All this is good for consumers, but when a change like that occurs, you wonder what is going on. There is evidence in the business news that the national economy slowed down in June — are gas prices a reflection of this? Regarding this week, future prices Friday and today reflect a new gas price of $1.99. Since prices are in the $1.70’s in some places in the Grand Rapids area, I expect a price hike later this week to about $1.99. If something strange happens with futures prices, I’ll make another post Tuesday or Wednesday. Up, up, up to $1.98 on Wednesday, August 4. CORRECT!