Comment on the July 6 prediction: As predicted, prices have been dropping steadily, down to $2.25 along Lake Michigan Drive, in fact. So, the prediction was CORRECT.
Sunday, July 19, 2009, 11:00 AM: Retail prices have fallen significantly this month, lagging but in line with the drops in the wholesale price as indicated by NYMEX and elsewhere. However, last week’s rally on Wall Street started to affect the energy markets late in the week, and NYMEX prices rose 13 cents a gallon. We are at the point where rising wholesale prices are colliding with dropping retail prices, which means a price hike is on its way, perhaps as soon as Monday. I predict a re-set to $2.49 a gallon, except for the handful of gas stations still at that price. Yes, I’m talking to you Speedway Ada! — Ed Aboufadel
I’m not 100% convinced we will reset, yet. The market will have to stay flat or rise on Monday for this to happen. A fall in the market will let us skate on it until Thursday. It will be interesting.
As of 8am, oil up $1.24 and RBOB up 2.2 cents.
It looks like the oil speculators are betting against the dollar again with all the talk of budget deficits and government (health care/bail out) spending increases. The money has to come from somewhere – even if it is our own government counterfitting ( by printing worthless or greatly de-valued) US currancy.
It’s not looking good for tomorrow. There are many factors pointing toward a spike for tomorrow. Yeah, the margins are at a negative (Indianapolis at -14 cents, -6.29 cents in Indiana and Michigan at -1.64 cents). But that’s not all. History shows that after a period of dropping, Speedway has a hair trigger when it comes to the merging of the average price and the spot price. Strangely, the low end also moved up in Indiana and Michigan.
I thought looking at the rack prices from the Today In Oil page and seeing Indianapolis’ rack 9 cents power than Chicago’s that it could influence whether a spike would happen. But with Indy’s margin in the negative by 5 cents more than that, it doesn’t help.
Nope, Indiana and Michigan will see a spike tomorrow. I expect Indiana to fall in the $2.40-2.45 range, and Michigan to fall around $2.45-$2.50. NW Indiana will see their prices rise to the $2.50-2.55 range.