Comment on last weekâ€™s prediction: Prices are falling, but slowly, not significantly, so 1/2 CORRECT, 1/2 WRONG.
Monday, August 14, 2006, 12:30 PM: Wholesale prices have fallen hard, including an 8-cent drop today. According to NYMEX (and CNBC), we have a wholesale price of $1.98, which corresponds to a retail price in the $2.50 to $2.75 range. So, why are prices still in the $2.88 to $3.03 range in the area? Iâ€™ve heard recently from two industry contacts, and they tell me first that Chicago-area wholesale is out-of-whack with NYMEX right now (the good â€˜ol 10-cent â€œChicago Summer Premiumâ€). CBS radio 780 AM out of Chicago reports that Chicago has the highest average price in the country right now. (2) Because of the panic-buying last Monday, retailers had to refill their tanks on Tuesday, at prices 25 cents higher than they are today. I guess retailers arenâ€™t ready to take a loss on that purchase from last week, and competition from other retailers who bought gas Thursday and Friday is limp. Prediction: prices keep falling all week.