Month: May 2008

$3.999 again soon; not sure about over $4

Comment on the May 10th posting:  Yes, we had a price re-set last week to $3.99, so the prediction was CORRECT.

Monday, May 18, 2008, 11:45 AM:  Wholesale prices are a bit higher than a week ago, when we hit $3.999, and there are a lot of low $3.80’s around town, so I expect a re-set to $3.99 again this week.  We might officially go over $4, but I suspect that Speedway is going to resist doing that as long as they can, as they did when we first went over $3.  Even the refiners are losing money in this environment, because while oil has doubled in price since last May, due to slack demand, they have not been able to do the same with gasoline.  (If they could, we would be paying $7 a gallon right now!)

$4.05-$4.15 coming Monday or Tuesday. Diesel to $4.75+.

After fielding through a few phone calls and seeing a news spot on Channel 8 “Gas Surprise” I wasn’t sure what to expect this morning. I logged on Channel 8’s site to try and find a gas story to see if I had missed something. Not really.

I then had a few text messages asking if gas was going up today, some sort of rumor? Well its not.

However, I believe with today’s news (Goldman Sachs upping oil forecast for 3Q&4Q to $141, China needing Diesel for recovery efforts) that we’ll see record oil prices (already over $127). Gasoline and diesel/heating oil are already way up, gasoline up 7 cents and diesel up 8 cents.

As long as these price increases stick tonight, I’m confident we’ll see $4.05-$4.15 come Monday (or as late as Tuesday if stations want to lose money), so MAKE SURE YOU’RE FULL on Sunday night.

Diesel will continue its climb to near $5 on this news and global supply worries, and I really don’t see an end in sight.

The pain at the pump continues.

Patrick

$4+ Gasoline and $4.75 (Possibly $5) Diesel is likely

As Speedway hikes to the predicted $3.999 this morning, I was busy looking at markets to see what’s going to happen next.

Unfortunately, it looks like things still aren’t as bad as they will get. I expect gasoline to crest $4 in the next week or two, and diesel prices look like they will accelerate toward $5 as global demand continues to cause supply worries. I expect diesel to hit $4.75 and rise as high as $5 here in the Grand Rapids area before moderating into the beginning of summer.

There isn’t much you can do except to park the car for a while or to trade in the gas guzzler. We’re in a period of sustained higher prices. Don’t expect prices to get back into comfortable territory for quite some time.

For the immediate future the outlook is: higher prices until early June, some moderating towards July, and a pickup in prices in mid-August as Hurricane season arrives. Hurricane forecasts can and will greatly effect pricing, so stay tuned to those forecasts.

Patrick

When will the fever break? $3.999 appears to be next.

Comment on the April 30th posting:  There was a hike last week to $3.89, so any brave predictions that $3.75 was the high for the year was dead WRONG.

Saturday, May 10, 2008, 4:45 PM:  My previous prediction was based on the observation that metals had stopped going up and agricultural products had stopped going up, so now it was energy’s turn.  Nope.  You know, though, this is what happens at the end of a big run up — instead of 50 or 100 things going up, only 2 or 3 do, until the impulse to buy disappears.  At some point soon, that will happen with oil and gas, and there will be a day when the wholesale price drops 10% in one day, and at that point the fever breaks.  But I have no idea when that will happen, and the way wholesale prices continued to climb through Friday was scary.  NYMEX prices are up 10 cents since Tuesday, putting the 20-cent margin price at $4.01, and NYMEX is working better than AXXIS for predictions right now.  So, the scene is set for a hike this coming week to $3.999 a gallon.  Ugh!!!!

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