Tuesday, August 12, 2008, 3:45 PM: Didn’t get to check in last week as I was traveling and unable to connect to the Internet. Imagine my surprise, though, upon returning to GR to see that prices haven’t moved much. I got a media call at the end of July asking about this, and at the time, the move in retail did seem in line with the move in wholesale. However, with the price hike last week to $3.89, and with the slow, slow drops since then, we seem to be a price leader in the region, as prices are $3.62 in Fort Wayne, for example. Last year in late summer, NYMEX became a lousy predictor of retail prices, and the same is true this year. Using last summer’s and this summer’s data, I’ve tried this afternoon to cook up a short-term predictor based on a combination of the NYMEX and AXXIS prices. I have no reason to believe why this works right now, but taking 1.25*AXXIS-0.4*NYMEX seems to get us to the right wholesale price. Yes, that doesn’t make any sense. However, using today’s prices, we get a 0-cent margin price of about $3.67. With current prices in the $3.72 to $3.89 range, it is in that grey zone where we could get a price hike because some stations are near the 0-cent margin price, or we could pass, because other stations are still at $3.89. So, no prediction, but if you can buy gas for $3.72, then you should do so.
Why We Are Here
Ed A.: ab...@gvsu.edu
Craig P.: cr...@paull.net
Tim S.: ts...@gmail.com
Bill E.: pa...@yahoo.com
The name of the site is based off an essay Ed wrote for the Grand Rapids Press titled "The Gas Game". The current website was established later by Patrick DeHaan after he and Ed predicted gas price hikes on GasBuddy's website GrandRapidsGasPrices.com, as well as Ed’s personal web page.
Note: To be precise, add 9/10 of a cent to all prices described on this web page.
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