Month: November 2006

Buy gas for $2.10, then prepare for price hike

Comment on Nov. 17th’s prediction:  You were able to get $2.25 or lower (CORRECT), but prices rose to $2.34 on the day before Thanksgiving.  And then they fell again below $2.30 by the weekend.

Monday,  November 27, 4:30 PM:  Wholesale prices at the close of trading today are about $1.60. That translates to a 0-cent margin price of $2.11 and a 20-cent margin price of $2.32, and wouldn’t you know it, prices in town are in the range of $2.10 to $2.29.  I expect we get a price hike before the week is out, back above $2.31.  In the meantime, go buy gas for $2.21 on 44th Street or $2.10 on Division Street.

Gas Price War!

There seems to be a pretty decent gas price feud going on at the Speedway, Admiral, and Rich at 32/33rd & Division! Prices are currently $2.10 at Speedway and Admiral with the Rich selling at $2.11! This is definitely a loss of profit for these stations, and if you have time, go take advantage! These low prices shouldn’t last long before a reset back to 2.29!

~Patrick

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Thanksgiving price hike, Summer 07 outlook

Hi everyone! Just when I thought we shouldn’t see a gas price hike
before Thanksgiving, it looks like some news on the market may go
against that theory.

Today, I was reading the news that the largest refinery in the U.S.
(Baytown, TX) @ 575,000 barrels was running much lower output today due
to an unknown issue (I couldn’t immediately find out why). That and one
of Citgo’s refineries also went down, adding to worries about gasoline
production heading into the winter.

Coupled with the fact that we’ve seen a 6 week decline of gasoline
stockpiles, wholesale costs are now at 1.60 again, and with a few
stations down to 2.14, I’m pretty sure we’ll see a reset unless they
like to continue to lose money.

Get gas today, or you might see 2.37-2.39 at the pump tomorrow or Thursday.

I was starting to think about Summer 2007 gasoline prices, and with all
the oil cutbacks that OPEC is so blindly making, I’m starting to think
that oil will shoot way up come summer, then hurricane season comes on
the radar… many things coming together… and right now it doesn’t
look good. If OPEC continues to simply cut oil because current prices
are too low, they better be quick to act when oil shoots way up in the
spring because of low oil inventories. They are already talking about
another cut in January, which, if they follow through on, could lower
output by 2 million barrels compared to a month ago. All this could
make gasoline $3.50 or higher. Lets hope OPEC gets it right and at
least puts more oil out come Spring time.

Anyway, have a blessed Thanksgiving!

~Patrick

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Hold out for $2.25 or less if you can

Comment on the November 3rd prediction: It was basically WRONG. Prices did not drop much over that weekend, and we got a price hike to $2.39 on November 7. Although prices then fell to as low as $2.12 in town by the weekend of the 11th, on November 16, prices rose again to $2.35.

Friday, November 17, 9:30 AM: Due to two very busy weeks at work, I haven’t had time for the Gas Game, but somehow I got gas for $2.12 during the past two weeks. On NYMEX, the HU contract is going to be eliminated at the end of the year, replaced by the RB contract, and you can see this week that the prices of the two have converged. So, for prediction purposes, we’ll only need the RB contract now. With the RB contract yesterday morning, we would have had a 20-cent margin price of $2.31, but, as you saw, prices rose to $2.35. We have been paying extra for gas this month, and you can see it on the national price map. Looking ahead, oil fell 4% yesterday, continuing its fall from $77 a barrel on July 14 to about $56 now. You would think gas prices would follow over the next few weeks. December is usually the time of the year when gas prices are the lowest. Short term, I would hold out for cheaper prices (below $2.25) by Sunday or Monday.

2.12! Wow. Gas Price reset soon?

After logging in to GrandRapidsGasPrices.com this afternoon, I noticed
that local prices fell too fast… seems like that new Family Fare on
Leonard and Fuller really is fueling things (no pun intended). That
corner is the low price leader, with Sunday prices showing 2.12. They
are definitely flirting with losing money, or just breaking even.

Interestingly enough, many stations remain in the 2.30s, but for the
stations that are down in the 2.12-2.19 area, I’ll be expecting a price
reset Monday or Tuesday to about 2.29-2.37.

The Chicago premium should have come down a few cents, but market
prices are still hovering near 1.56 having a up and down week last week.

I’d suggest filling up this afternoon unless you’d rather take the chance of the gas price hike tomorrow or Tuesday

~Patrick

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Thursday Gas Price Update!

Well, the DOE report was pretty rough, and gasoline and oil has been trading up on the news that the U.S. will turn sharply colder and that OPEC may again cut production when it meets in December. Wholesale gasoline is back up to 1.58.

The “Chicago Premium” we’ve been seeing should let local prices go down a bit, as our local storage has gone up after 3 weeks of decline. The midwest is sitting on nearly 52 million barrels of gasoline, down from nearly 55 in the beginning of October, but up from 50 last week. Prices might fall down to 2.29, but I am anticipating another hike possibly next week. Its hard to tell with the Chicago Premium falling and wholesale prices rising. We shouldn’t see a huge drop, but we have room to fall a few cents.

It was interesting that Americans spent $3 billion less on gasoline just last month due to falling prices… and now that money will likely get injected back into the U.S. economy instead of OPEC’s.

Is OPEC getting greedy (talking about further cuts) or is it just me? When their target price was $22-$25 a barrel just years ago, now all of a sudden they aren’t happy with $60? Arrogant.

~Patrick

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