Comment on my 7/17 prediction: Basically CORRECT, as prices have been falling for a few weeks now, albeit slowly.
Monday, July 30, 2007, 7:45 PM: We are setting up for a price hike soon, perhaps as soon as Tuesday, to the $2.99-$3.09 range. If the AXXIS prices are correct, then the 20-cent margin price this evening is about $3.04. Gas is $2.68 in Fort Wayne, Indiana this evening! By the way, I spent much of last week driving between GR and Traverse City a few times. It was interesting to see prices go up a penny for each 20 miles or so north that I was of Grand Rapids.
Its definitely been a while since I wrote here updating you all on gasoline prices! As you have all noticed, gas prices have slowly fallen to the $2.80s seen around the area today. Wholesale prices have slowly been falling, we saw a low of about 2.06 last week before a slight rise to today’s 2.0948.
We may see some investors cash out their oil and gasoline profits as the U.S. market fears of a downfall in housing scare folks off. This should cause gasoline prices to fall as well.
We’re still not out of the woods yet- hurricane season is starting to gear up. Today is July 30, and the major part of the hurricane season launches August 1. We’re seeing surface ocean temps in the Gulf running 85-90 degrees, which is definitely hot enough to cause a sneeze to turn into a major storm.
We should see prices slowly fall to the 2.70s, but a hike to 2.99 might occur somewhere here in the near future if prices on the market continue higher.
Midwest PADD storage is at 49.3 million barrels, virtually unchanged from a week ago.
No hike is imminent YET, but keep on the lookout here.
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Comment on Saturday’s prediction:Â Prices did just that, with $3.19 in a number of different places in town on this afternoon.Â CORRECT.
Tuesday, July 17, 2007, 2:13 PM:Â Whoo hoo!Â Lower prices, here we come.Â New York wholesale prices have dropped 18 cents in a week, and Chicago wholesale prices have dropped 45 cents!Â That has to put the 0-cent margin price below $3, so look forward to continued price drops as the week goes on, and shun those stations that are still above $3.30.Â I don’t see any sign of a price hike this week.
From The Chicago Tribune:
An enormous BP oil refinery in Indiana is planning to pour
significantly more ammonia and industrial sludge into Lake Michigan, it
was reported. The move by the British Petroleum oil refinery of
Whiting, Ind., runs counter to years of efforts to clean up the U.S.
Great Lakes, The Chicago Tribune reported Saturday.
Honestly, WHAT THE HECK, BP? First you shut down your refinery causing a price spike, next you announce plans to pollute Lake Michigan even more than you expected?
Someone needs to sue BP PLC over its lack of refinery maintenance!
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Saturday, July 14, 2007, 10:15 AM: My appearance on WOOD-TV 8 on Wednesday appears to have coincided with a top for wholesale prices. By that evening, as indicated by postings elsewhere on this site, wholesale prices were starting to head down and then BP started up the unit at its Whiting refinery that was contributing to the recent spike in prices. So, the lesson here is to have me appear on the news as a way to influence the refiners to get their refineries working again. I’m joking, but let’s see where we are at this morning. The Tuesday wholesale price spike has been reversed, but the Tuesday retail hike to $3.39 is still intact, which makes sense, because in my experience, retail prices hikes are usually based on the previous days’ wholesale price. That suggests to me that the 20-cent margin price is near $3.39. Prices are above $3.30 practically everywhere except on Cascade Rd and at the price clubs. So, I predict prices to fall slowly but surely the next few days, perhaps down to $3.19 in several places. Then we’ll see what happens next at the wholesale level.
BP Plc will begin startup today of a
unit at its Whiting, Indiana, refinery, the biggest in the
The 235,000 barrel-a-day crude unit, which was shut July 9
for unplanned maintenance, is expected to be at full rates by
next week, a person familiar with the plant’s status said. The
refinery can normally process more than 400,000 barrels of oil a
day. The unit had been expected to start up this weekend.
“All of the news until now has been bad and bullish for
the Midwest refining sector,” said John Kilduff, vice president
of risk management at Man Financial Inc. in New York. “An
insecurity premium had been built into the gasoline market. The
unit is opening earlier than expected, which is a relief.”
Gasoline traded down roughly four cents today, and with my sources informing me of large price drops on the wholesale level, we’ll see prices drop- perhaps sharply!
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