That’s right, I expect another good jump in gas prices, as soon as tomorrow (Friday) in many Speedway States. Speedway did not raise as high as anticipated resulting in a higher risk of a price hike sooner, and the wholesale market was up a large amount today.
Wholesale spot prices from Chicago rose 13-cents today and close at $1.35/gallon, nearly a 40-cent rise since Monday! Prices have risen about 15-cents today, but stations are going to be very eager NOT to lose money and will likely be forced to make a larger second hike. In my opinion, Speedway is probably upset that they only raised prices to $1.85 when they really could have gone higher. Now they might be forced to deal with negative PR with two price hikes. Will they hold out to Monday to avoid some negativity? Its happened before, but as you can see, they’re still losing a LOT of money per gallon with their small 15-cent hike. Prices at Speedway would need to jump to $2.05 to equal the same price on the wholesale market tonight.
We may see Speedway attempt to raise to $2.05 in a very odd fashion, or you may see small stations attempt to rise first with a very disorganized Speedway hike- I’m not sure how it will happen, but I am led to believe it WILL happen and SOON!
Diesel prices around the Midwest should be dropping below gasoline prices in many areas as well. Refiners have already begun to boost gasoline production but it looks like with stronger than average demand, prices will continue to advance higher.
There also continues to be small refinery disruptions nationwide tonight with multiple refineries in Louisiana having issues.
There is also belief that since Oil has broken the 50-day moving average, we are in the beginning stages of a rally in oil prices, which would mean my opinion that we have “rounded the corner” (Spring run up in prices) was correct, but we’ll need to wait and see.
One thing is for sure, if you delayed or forgot to fill up, it is still better to fill up at $1.85 than $2+.
Speedway States prepare for higher prices!
I’ve just received early notice that Speedway will be raising to just $1.85 this morning, which is excellent news and much less than expected.
However, I’m still weary of another price hike soon.
We’ll continue to monitor the situation.
Comment on the Feb. 17 prediction: There was no price hike last week, so the prediction was CORRECT.
Wednesday, February 25, 7:50PM: I just updated my spreadsheets, and I agree with Patrick that we’ll get a price hike tomorrow, because NYMEX shot up today, and tomorrow is Thursday. I don’t think we’ll go over $2, though.
As I said earlier today, gasoline prices are likely to jump across all Speedway States as soon as tomorrow to $1.99 or even higher.
I’ll follow up and let you know what’s going on.
As you may know, Midwest prices have been seen as low as $1.59, much lower than the national average today of $1.891 according to AAA’s Fuel Gauge Report. A large reason of lower Midwest pricing as of late is that PADD 2 storage levels have reached high levels, untypical for this time of year. I have said that we’ve recently benefited from this, what I call a "Chicago Discount". The "Chicago Discount" is due to a regional condition causing Chicago "Spot" Pricing to be lower than other areas.
Now onto the bad news.
Yesterday, ExxonMobil reported shutting down a unit at its 238,000 bpd plant just outside Chicago, IL (Joliet), which would cause a large drop in output at Midwest refineries. This, coupled with news from the DOE that regional stockpiles fell last week, as well as a huge nationwide drop in gasoline stockpiles, will cause a large price spike.
Any Chicago Discount will likely "dry up", and with the changeover to the April gasoline contract also adding to a hike. The gasoline contract for March, expiring today, was 8-cents lower than the new April contract, which takes effect tomorrow, causing a "triple whammy": More expensive April contract begins tomorrow, Refinery outage regionally, and a loss in gasoline stockpiles will definitely cause higher prices.
I would be *shocked* if prices don’t rise tomorrow and stations that purchase new fuel tomorrow would lose money if they do not raise prices.
I am unsure about the amount of the hike, but it may be over $2/gal, as soon as tomorrow morning.
Be sure to fuel ASAP.
Posted by mobile phone:
That’s right folks- I need to keep this very brief. Market conditions have turned ugly this afternoon and prices climing higher for many reasons. I am led to believe that we will see a hike as soon as tomorrow to 1.99 or higher.More soon! Get gas!
Comment on the February 7 prediction: Hmmm. Shell (yes Shell!) hiked to $1.99 on Monday, which matches my prediction, but the rest of the crew took their time, many waiting until Tuesday and their hike was to $1.95. I’m not going to give myself full credit: 3/4 CORRECT, 1/4 WRONG.
Tuesday, February 17, 2009, 7:40PM: It is a busy, busy time for me, but I have a moment to drop in for a quick post. I saw a number of articles on the ‘Net this weekend about how oil has dropped, but gas prices are up. As I noted in my last posting, welcome to February. I drove back from Chicago on Monday afternoon and I thought I saw a $2.05 as I drove along I-94 near Benton Harbor. It was not my imagination, as Gas Buddies say Shell hiked to $2.09 yesterday, but few matched. There are still a few $2.09’s around, but for the most part, we are still solidly below $2. Since the stock and energy markets stunk up the joint, maybe we are free and clear for a few days. As of today’s close, NYMEX prices has us in a $1.64 to $1.85 range, while AXXIS has us higher, but they are always behind by a day. I’m going to cross my fingers here and predict no price hikes this week.