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.

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