Wow! $1.96 in Columbus, Ohio. Pretty good deal, but remember that Speedway/Marathon is headquartered in Ohio… lucky them. If gasoline didn’t varnish so fast, I’d LOVE to go down there, pump 1,000 gallons, and store them.
Since I’m “smart”, I KNOW that you all have been enjoying the last month of sliding prices.
Pretty impressive. A month ago, prices were $3.19, and today’s price is as low as $2.14. Wow, in one month and a few days, prices have dropped $1.05 per gallon. At 10 gallons per week, the average person would save $546 per year. WOW! That averages to about a two cent drop per day. Some of you might be holding out everyday to completely fill it up until you think prices are going to bottom out.
Well, I think that time has come.
Wholesale prices have been sitting around the same price the last 5 days, and have actually come back up a few cents the last few days because traders believe that the huge drop in oil and gas prices was overdone. Perhaps! We haven’t seen such a huge drop in oil prices since the Gulf War in 1990. We’ve seen a $14/barrel drop in oil prices, and about 80 cents per gallon has been shed off wholesale gasoline prices.
So let tomorrow be that time where you completely fill your tank up. Thankfully we aren’t looking at a $3 price anymore, and no one can really complain about this hike, after all, I’ve been watching the pump prices come down and been excited just like everyone else.
Here’s the plan: I’m thinking we’ll see a reset to about 2.29-2.33 for the stations that are 2.15 right now- they are losing money. However, if prices on the wholesale market head back down (seeming more unlikely) we shouldn’t see a hike. (Thats the disclaimer). But at this point, I still believe that we should see a hike. So fill’er up!
A few notes… its somewhat a pet peeve when people blindly say that prices have come down because of elections coming… yes, I completely understand why people are LED to believe that, but prices aren’t that easy to see. I can understand why people would think its politicians, but again, lets look at the facts, that incidentally COINCIDE with this time of year:
#1: Summer vacations are done, no more driving to Disney World or Grandma’s house in Oklahoma. What am I saying? Demand for gasoline isn’t as high because of kids back in school! Less demand=Lower prices!
#2: Iran. Iran holds a lot of the pieces when it comes to OIL, and that has made us worried. However, over the last 4 weeks (while prices have dropped) Iran has stayed somewhat quiet, and bargaining continues. Traders realize that there is nothing but the middle ground: the U.S. doesn’t have the votes to have sanctions against Iran, keeping FEARS ABOUT OIL SUPPLY DOWN.
#3: Hurricane season. What happened to it?! A big reason why oil prices went up was all the forecasts showing what an active season it would be. What happened? We haven’t seen more than a few hurricanes form, and only ONE hit the U.S., and only barely a hurricane. Remember last year? Hurricanes left and right. Can you see why oil traders were worried for this season? It was predicted to be worse than anyone expected. Now that El Nino is making windshear, tearing apart anything that forms and directs it back to the eastern Atlantic, there isn’t as much of a worry!
#4: Summer gasoline requirements. Now that summer is nearly OVER, refineries can go back to a cheaper gasoline blend that doesn’t have all the pollution requirements because the hot hazy summer days are over. Easing pollution requirements makes gasoline cheaper because refineries don’t have to worry about making numerous types of gasoline. Remember earlier this year when the EPA was thinking about lowering the pollution requirements and gasoline took a week nosedive? We’re seeing that again!
#5: Getting rid of summer gasoline with additives. Refineries are eager to get rid of summer gasoline stockpiles before they age and varnish, thus excess summer fuel is now being DISCOUNTED so retailers buy it, and refiners don’t need to worry about access supply. Think of it as a yearly clearance sale! It didn’t happen last year because Katrina knocked out refineries making ALL supply limited.
If someone can tell me how a politician can control hurricanes, Iran, American’s driving habits, vacation habits, and oil refineries habits, let me know. Until then, there are your facts about who ISN’T SETTING prices.
Anyway, I’m tired out. That should be an essay for a class or something… Is your brain overwhelmed with all this gasoline nonsense? Its a lot to take in, but maybe you’re getting the hang of it.
Until next time,