Monday, September 15, 2008, 4:20PM: I think we’ll look back on this weekend as the turning point for gas prices for quite a while. On Friday and Saturday, there were price hikes to $4.09 and then $4.19, driven by fears of massive shortages due to Hurricane Ike striking Texas, and a sense that we were being deluged by our own hurricane. In fact, a few Citgos in town went up to $4.29, and prices were temporarily above $5 in the central part of Michigan. Whether we will be facing shortages and rationing remains unclear (and I suspect, unlikely). What is clear is that as of Sunday night, Michigan and our friends Illinois and Indiana were stuck with the highest average prices in the country. The gas price map on GasBuddy was glowing red in those states last night, and this afternoon, and the Governor and the Attorney General really need to investigate.
But, more volatility was in store. NYMEX opened up over the weekend for a special session, and prices there plummeted. It may be because the hurricane caused less damage to the energy infrastructure than feared, but it seems that the real reason is that some Wall Street financial firms are falling apart, and with it, the inflated prices at NYMEX and elsewhere. Today, crude oil hit $96 a barrel, while NYMEX gasoline futures prices fell 20 cents since Friday and 43 cents since the beginning of September.
Patrick wonders if these price drops in New York will make their way to Ferrysburg, Michigan, which is where the rack rate is set for the Grand Rapids area. It has to, and it will start very soon. Expect lower prices starting tomorrow.