Gas Prices: Speedway Identity Issue? Rising Prices!

The DOE Report came out this morning, what else is new? Not much, same
old bad news.

The Bad:
-Refiners used 88.3% of capacity, below the 88.7% analysts estimated,
and below the 90+% used just weeks earlier.
-Crude oil stockpiles increased, but not as much as analysts
estimated. They rose 1.1mb compared to an estimated rise of 1.5mb.
-Gasoline stockpiles decreased 1.1mb.
-Distillate demand (diesel) is 5.4% higher than just one year ago

The “Good”:
-Gasoline demand is slowing, up only 1.6% over a year ago, compared
with a rise of 2.5+% just weeks ago
-Crude oil and finished gasoline is being imported at a higher rate
due to the high prices.

Speedway is in the middle of an identity crisis. They aren’t sure if
they want to match to $3.19! A few stations are reporting $3.19, but
not many! The negative PR that comes with $3 is HUGE. Thats most
likely why Speedway has tried to resist $3+. If they hadn’t been
concerned with this, I’m willing to wager that they would have
already hiked to $3.05 a few weeks ago when I had “predicted” it. Now
that wholesale prices are way higher, there is no chance for them to
do a small daily increase- its just the ugly $3.19 all at once.

I do think that $3.19 is over done. $3.05-$3.09 is where prices
should be, if Speedway wasn’t trying to play us all.

Keep that tank full, and cut your driving! Its beautiful outside- let
the kids ride their bikes, let them walk to school (and REMIND them
NOT to cross against the signal)

Keeping an eye out, expecting $3 across the boards here soon. Don’t
even think about $4 yet. There is no chance.

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3 Comments

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  1. Our cost is around $3.07 (not counting 8+ cents per gallon in Credit Card fees). So, basically the whole state is losing money on everything they sell today, because Speedway wants to prove some point. Speedway normally restores to 18-22 cent margins, so we are looking at them needing to move to $3.25-$3.29 based on today’s cost.

    I really don’t know what Speedway is trying to accomplish, but customers don’t know that stations are losing money to keep prices below $3. At least, no one has called and thanked me for doing it. They would’ve been better off moving to $3.09 on Monday and $3.19 – $3.25 today, instead of going from $2.99 to $3.29 tomorrow.

  2. Thanks for your input!

  3. If your costs is around $3.07, that means the RB prices are not a good approximation to the wholesale price right now. The good old “Chicago Summer Premium” has re-emerged!

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