Temporary “hike” today shouldn’t last long
Thursday 31 Jul 2008 | Posted By Patrick | Predictions
Today’s sneaky price hike was the result of a poor DOE report that showed gasoline stockpiles posting a surprising loss of 3.5mb when they were “expected” to rise marginally by 500,000 barrels.
The market yesterday was up 14-cents per gallon. It’s a weak excuse to rise prices, as only stations that bought gasoline today and late last night would be effected, but I guess they’ll try anything.
Prices on the market today are down, as I expected after a large rise Wednesday. We shouldn’t see stations that raised prices hold on long, I expect prices to drop down to the $3.70’s this weekend. I just hope the market hasn’t lost what we were enjoying… a decent size sell-off.
For now, shop around. Some stations didn’t even raise prices, perhaps because they didn’t need fuel, but even the stations that did hike shouldn’t hold out long. We’ll see prices continue their way down.
Patrick
PS- Benchmark station in Indiana just jumped 20 cents from $3.69 to $3.89…wowzers!
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I think this was a really lousy thing for stations to do to customers right now. With all of the economic bad news of late and the continuation of that trend, the gasoline prices coming down were at least some “good” news!! Especially given the market conditions. Thanks to the fact it is Thursday and the weekend is coming, stations simply seized the opportunity to make a few more bucks.
I’ve been working in Lansing all week. With the drive from Grand Rapids I was happy to find a Marathon station next to the jobsite that had significantly lower prices than everyone else from here. I was filling up all week at 15 cents less than GR. Yesterday I topped off at $3.66, this morning they were $3.89. I cried a little.
Well, the 8 cent drop in the market only resulted 1.25 cent drop for rack prices… Our cost is right about at $3.70 today, so $3.859 is right at the 14 cent markup that we try to average. I don’t think prices are going to drop much this weekend, unless we get a bigger drop tonight. Stations that decided not to move will either hurry and go up today or bring down stores around them.
Kathy W: You can’t blame the retailers for trying to take advantage of something. Thanks to the speculators, the market went way up for no good reason (there is a huge difference between lower than expected stockpiles and a shortage). When the market goes way up like that, the oil companies pass the increase on to us.
It’s unfair and unreasonable to expect stations not to pass that cost increase onto the consumers. Most stations average a delivery every 3 days. So, even if they didn’t get a delivery yesterday, the odds are pretty go that they will get one today. If they don’t go up with Speedway, it might be too late by time they get their delivery.
Comment to Retailer:
I guess I am frustrated with the quick rate of increase at the pumps (due to speculators or whatever the cause) but the seemingly slow rate of decrease at the pumps when the price is clearly going down. Kzoo and Plainwell stations were going down at a rate of several cents each day in the past week before the sudden hike; stations in the GR area were very slow to come down and never made it down as low as Kzoo and Plainwell stations before the hikd.
We also seem to see such wide ranges of pricing in Michigan; we noticed when we traveled out East this summer for 5 days that the price between stations/towns did not fluctuate by more than a few cents and in Michigan, the price can be 10-15 cents different from one city to the next or even 5 cents in the same town. Family living in other areas of the country remark about the same thing.
Sure would be nice to put a cap on the speculation for awhile…or something! I would be comfortable paying $3 for a gallon of gasoline and have it stay at that price for a good long time, not continually going up and down the way it has been lately. It would be much easier to balance my household budget with prices that don’t fluctuate quite so much or so often…