What da hay? Lousy DOE report.

Well, I sure was wrong about a price hike! However, as everyone has noticed, prices have not gone any lower than around 2.38. I’m surprised that they are still this low while wholesale prices remain high at around 1.87. Last year, when there was no “RBOB” (ethanol) contract, and the wholesale price was 1.71, we got a hike to 2.43. Here it is this year, we have ethanol now in most gasoline (making it more expensive) and a wholesale price of 1.87. Retail prices *should* be around 2.59 again! But they have indeed surprised me this time!Having said that, the DOE report was TERRIBLE again today. Refineries are *still* letting prices climb before they ramp up production it seems. Utilization was only 85.8% of capacity this week!! Yikes. They need to get that number up to 93% ASAP or it’ll spell disaster for consumers. Crude oil inventories fell nearly 5 million barrels, gasoline fell by 3.8 million barrels, and distillate/diesel fuel fell by 1.8 million barrels. Total petroleum commercial inventories PLUMMETED by 15.8 million barrels last week. Gasoline demand is up 3.3% over last year, while distillate/diesel demand is up 7.8%!!

That is one of the worst DOE reports I’ve seen for this time of year. In fact, I’ve never seen TOTAL inventories drop by that much. Nearly 16 million barrels?! Thats nearly a 672,000,000 gallon decline in total inventories.

Having said that, I can’t see wholesale prices going anywhere but WAY up today. Probably will close over 1.90, maybe even 1.95 (to hit 1.95 would mean a 7 cent gain). Now, after a 7 cent gain, do you think stations can afford to keep prices the same?

My dad jokingly said that Speedway must have gotten a copy of my last e-mail and wanted to make me look silly so they didn’t raise prices. I jokingly told him that if that were to actually happen, I’d welcome it. If Speedway would rather keep prices low than to have me be correct on them raising prices- that’s totally fine with me (and you, I assume). But that’s most likely NOT the case.

Anyway, I’m sure you’re wondering where prices go from here. I’m not sure, I’ll have a better idea at the end of the day (the market will go up today). But it *COULD* be 2.59-2.69 at worse 2.75. (That’d be nearly a 40 cent increase!)

I will DEFINITELY follow up and let you know what my PRICE TARGET is for tomorrow.

By the way, gas stations in the East Paris/Cascade Rd area area still at 2.38. Speedway has 5 cents off for Speedy Rewards customers (2.33!!!)

Fill up.
~Patrick

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