Tuesday, May 26, 2009, 1:55 PM: Woe to us. Prices rose at random places on SATURDAY to $2.59, and today Speedway is making sure we understand with a system-wide re-set. The new price in Michigan is $2.69 a gallon. There are two separate issues here: one is the relentless climb since April 27 (when gas was $1.99 a gallon). The other is what happened this weekend.
The relentless climb could be just a delayed seasonal effect, as we get these moves every year in March and April, often related to the switch to summer blend gasoline. I think, though, that after the stock market recovered from that scary low in early March, the speculators are looking to make money again and driving up wholesale energy prices is a way to do it. I have some confidence in this observation because it isn’t that retail demand for gasoline is on the rise, and gold prices have been climbing lately, too.
As for this weekend, there are some goofy things going on in Chicago. I learned this morning that wholesale prices went up a lot on Friday in Chicago and that’s what caused the hike to $2.69. Now, this morning, they’ve dropped almost a dime a gallon, and maybe, just maybe, we’ll see that in our retail prices by Wednesday. That’s a wish, not a prediction.