Oil up, gas down?

Comment on 9/3 prediction:  Prices hiked on Tuesday the 4th to $3.24, so the prediction was CORRECT, although a bit light on the price.

Wednesday, September 12, 6:00 PM:  So, a barrel of oil hits $80 today, but wholesale gas prices don’t seem to be spiking.  What’s going on?  First, regarding oil, the Federal Reserve is getting pressured to lower a key interest rate next week, due to the problems with mortgages right now.  Lower interest rates usually leads to a weaker dollar versus other currencies, so we get inflation, first in commodities like oil and gold.  Gold has been going higher, too.  So, it is weird — weak economic news leading to higher prices, but that might be a short-term effect.  As far as gasoline, we have entered a period where prices tend to fall, from mid-September through late December, as demand drops off.  Although there is news of refineries closing, wholesale gas prices have been moving lower.  If the AXXIS prices are to be trusted at all, we are 20 cents lower than we were when we hiked to $3.24.  That gives us an estimate for the price range to be $2.84-$3.04, and what do you know, you can get gas for $2.89 in Wyoming.  Whether there will be a price re-set to above $3 on Thursday or Friday is a tricky question, since some stations are below $2.90 right now.  So, no prediction, but be vigilant.

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  1. The Chicago prices on the AXXIS site are very close to the average rack prices that I get (Muskegon is actually a lot cheaper than other racks this week, putting it about 6 cents below the AXXIS price).

    Cost is about $2.76 with a 20 cent margin at $2.97. I would say that an increase this week is extremely unlikely. Wholesale prices have been moving up a little the last couple days. So, if they keep going up and retail prices keep going down, we will probabally need a price restoration next week.

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