## Math calculations

I inquired this week about the actual wholesale price, to re-calibrate my spreadsheet if necessary. For those of you playing the Gas Game at home, the real 0-cent margin price on Monday was about \$2.83. This is very close to my daily calculation, if you *average* the “HU” and “RB” contracts. In another month or so, it should be clear how to use the new “RB” contract. Although we are not happy about recent price hikes, they actually could have been worse, but Speedway and friends are using smaller margins right now, rather than price gas over \$3. Another positive is that wholesale prices have dropped nine cents since Monday, meaning some stations will set prices below \$2.80 over the next few days, I predict. All went as predicted, with no price hike, and prices below \$2.80 at several places, including along Alpine, so CORRECT!

## Unwarranted

Grand Rapids Gas Buddy Peg has brought to my attention that Speedway’s website indicates a price reset to 2.95 is occuring.

This price hike/reset is completely without warrant. Wholesale prices fell 6 cents yesterday, and are down at this time for today.

Most likely, Speedway is getting greedy and trying to restore the money it didn’t make when they were forced to sell under \$3. (Remember me saying that I expected a rise to 3.05-3.15?) Because they were “forced” (by themselves) to hold under \$3, they didn’t make as much profit, so now that prices on the wholesale market are lower, they are attempting to recoup that money!

Don’t expect the hike to last long. Prices should come back down reasonably fast.

~Patrick

## RB Contract… ?

As I have posted before, the most difficult part of studying gas prices is figuring out the wholesale prices. I use the NYMEX “HU” unleaded gasoline contract as a proxy, because I don’t have access to the wholesale prices in west Michigan. Lately, I’ve also been observing the “RB” gasoline w/ethanol contract, which has been a better predictor the past few weeks, except for the past few days. This week’s rise to \$2.95-\$2.99 makes sense if you go back to the “HU” contract and set the “Fudge Factor” to zero. Another theory is that Speedway and others are tense about posting a price above \$3 a gallon, and are selling gas near cost to keep the Governor happy. This morning, NYMEX gas prices are down, but that could change, so it is difficult to see what happens over the next few days. The crystal ball is foggy. Prices fell to as low as \$2.80 around town over the weekend, then re-set to \$2.95 on Tuesday at most places.

## Where’s the hike?

It seems if everyone is suprised the price hasn’t taken a huge jump up yet.

Gas Buddy “itsMorph” states that when he was at the BP in Rockford this afternoon, the price was 2.98 due to the fact the owner had just filled his huge storage tanks. The owner stated he was surprised no one else had hiked.

He’s not alone.
The fellow GasBuddy Predictors and I agree a BIG hike is coming. We *will* see over \$3.00/gallon.

We first thought Monday. Prices went up on the wholesale market 6 cents. No rise. We thought Tuesday. Another 6 cent rise today on the market. Wholesale gas is up to 2.21/gallon. Last time we saw a hike, wholesale gasoline was 2.06. You can see we’re in for a rough day tomorrow.

Due to the fact that *ALL* gas stations that are buying more gas are losing money at the pump (The BP owner later was FORCED to lower his price to 2.84 to compete) we’ll see a rise VERY soon, and it will hurt your pocket, and it will be on the news.

I am looking for Grand Rapids prices to hike tomorrow with Speedway leading the way. I expect prices to hike to 3.09-3.15. In some areas this represents a 46 cent hike!! I would fill up everything you can before the price heads up tomorrow.

ALSO- I don’t see prices coming down for the near future. I’ll be keeping a watchful eye on the weekly DOE report tomorrow which tells us if refiners are refining enough oil into gasoline. If that report doesn’t say that refiners have been running near 90% of capacity, we’ll be in a world of hurt, and could see 3.25 soon.

This is not a good picture, but with you conserving, we can all make a small difference. Personally, I am biking to school. Its only 2.5 miles per way, but I’m saving gasoline money, parking money, and wear and tear on the car. Plus I feel better about watching all the cars sit at the red light.

Make a difference! In the mean time, FILL UP!

~Patrick

## \$3 soon.

Hello everyone!

In case you didn’t see in my e-mail yesterday, I am predicting we see the nasty “\$3” sign come out today.

The futures market has been going up and up, due to Iran and Nigeria, and ethanol concerns as refiners switch from MTBE to ethanol, but those ethanol concerns are pretty much unwarranted as the head of the Renewable Energy Council (or something) said there is enough ethanol.

Looking for \$3.05 here this morning, fill up, top off ASAP!

~Patrick

## \$2.99 soon

Based on yesterday’s wholesale prices, it is going to be \$2.99 either today or Monday. I think the futures markets are closed today, so the wholesale price shouldn’t change the next few days. Oh, and Allendale is the place for cheap gas this morning. Prices did not go up last Friday or Monday, so the prediction was WRONG. We did get a re-set on Wednesday to \$2.89, and then another 6-cent hike on Thursday.

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