Gas prices will most likely bottom out now — don’t ask me about stocks

Comment on the November 21 posting:  Much of that commentary was about the stock market.  As soon as that posting hit, the market started climbing, with the Dow going from 7400 at 3PM that day to its close near 8600 today.  OK, readers, that’s the second time this fall I’ve been a contrary indicator for the stock market!  (See October 21.)

Wednesday, December 3, 2008, 10:00 PM:  The hike last week to $1.75 was the first price hike in three months!  The hike was curious in a number of ways.  First, Speedway initiated it on Thanksgiving Day.  Second, using our old friend the 20-cent margin, it was kind of a lame hike, as $1.89 would have better fit my mathematical model.  Third, at least along Lake Michigan Drive, the hike was not embraced by Big Red’s competitors.  So, after the dramatic changes of the past three months, I am sitting back and trying to determine, since we are back to prices when the Gas Game was started, are we going to go back to price behavior from six years ago.  I don’t know yet.

I am pretty certain, though, that gas prices are going to stop going down soon and start turning up.  Why?  Because they do this almost every year in late December or early January.  Some history:

late 2007:  prices vibrated around $3 a gallon and then took off in the winter and spring of 2008.
late 2006:  prices danced around $2 a gallon and then made it to $3 by the end of April 2007.
late 2005:  $2.03 on December 1 of that year.  $2.95 by late April.
late 2004:  $1.75 after Christmas, $2.43 on April 4, 2005.
late 2003:  $1.48 in December, rising to $2.15 by June 2004.
late 2002:  $1.21 in December.  By March, $1.80 a gallon.

The low in the area this evening is in Allendale ($1.56).  I suppose we could go lower, but probably not much more.  Maybe even a price hike on Thursday?  (That’s not an official prediction!)

5 Comments

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  1. Read an article today about oil possibly dropping to $20.00 per barrel. The comment was made by the CEO of Gulf Oil Corp. $20 oil could bring gas prices down to near $1.00 per gallon!!

  2. While this info is true, this year has been anything but a typical year. I guess I’ve come to the conclusion that anything can happen! Thanks guys you do a great job! PS $1.53 in Portland today, it was over $1.70 on Tuesday!

  3. I Just read an article that said oil below $25 and gas below $1.00!!

    http://www.foxnews.com/story/0,2933,462284,00.html

  4. I love this site but you guys and your predictions seem to be opposite! Keep saying there will be raises!!!!!!!!!!!!!! Maybe oil will go below $40 today and continue!!! =)
    Seriously, I still like the site, I know it is unpredictable.

  5. Oil at $41 and change as I type this. I think it will go lower and stay there until the WORLD economy picks back up again…and I don’t think that will happen this winter. Deflation may be upon us and thats not good at all. Prices dropping yet no one still buying. Gas as I see it could be around 1.25 by new years. With inflation etc, gasoline is cheaper now than it was back in the late 60’s early 70’s.
    Those of us with good jobs Enjoy!
    Let me also say this. The price of fuel being WAY DOWN only puts money into our pockets to use here in OUR economy. Stay out of Walmart and use that cash to support your local grocer, hardware, lumberyard, CAR DEALER.
    Dan in Rockford
    P.S. also looking at mortgage rates going to 4.5 or lower too. Time to refinance soon come!

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