Mr. Wholesaler, Tear Down Those High Prices!

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.

4 Comments

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  1. Rack prices are down about 31 cents tonight. But they haven’t lifted the allocation for us yet.

    Makes me wish that we let our stations sit empty all weekend instead of refilling them at the higher price after Friday’s panic buying.

    It’s kind of crazy that the closing price on the NYMEX is exactly $1 cheaper than our rack price was this morning.

  2. Gaoline still hard to come by!! Allocations still in place, not sure when it will stop. Stations should leave there price up so they can stay in product. This is a nightmare for haulers.

  3. Yeah, our allocations are still in place today. But, I’m hearing that the terminals that we haul from have tons of product. They are always paranoid that we will be selling product to other stations if they don’t restrict us. I would guess that they will lift the allocations by Wednesday night.

  4. Regarding the Michigan/Indiana/Illinois high-price triangle, Georgia was highest in the nation over the weekend. I see on the map, now, they’ve been joined by Alabama and Tennessee.

    Add Kentucky and Ohio and the line comes right up through the mid-section of the country.

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