Comment on Tuesday’s prediction: Prices rose on Thursday, but just to $3.65, not $3.75. I am going to score it as 3/4 CORRECT, 1/4 WRONG.
Saturday, March 26, 7:30PM: I just saw Butler go back to the Final Four, and I’ve been thinking about this recent article in the GR Press concerning why retail gas prices are volatile. On this site, we’ve tried to explain the dynamic, and we hope it has helped you. I’ve been mulling over the gist of the article, which is that there are too many gas stations, and that causes prices to bounce around. I think that is actually true, but what is the alternative? If there were fewer stations, prices would stay relatively constant — at the higher price hike price! I’d rather have the volatility if that means there is an opportunity to buy gas at pre-spike prices.
Speaking of volatility, what is the world is going on at Cascade and I-96 today? This is what I observed: Forest Hills Foods had gas for $3.65 at around 3PM, and the Marathon was at $3.49. At 4:30PM, the Speedway and Shell were at $3.49, and the Marathon was back to $3.65. Did someone hit the wrong switch this afternoon?
Comment on the March 7 prediction: It was CORRECT, as prices rose to $3.65 on March 10. Prices then re-set to $3.65 again on March 18.
Tuesday, March 22, 9:30PM: Sigh. NYMEX and AXXIS indicate the wholesale price is now $3 a gallon — the highest this year. This corresponds to a price hike to around $3.75. Expect it Wednesday or Thursday. — Ed Aboufadel
When the bottom fell out of the market Tuesday, Chicago only fell 2+¢ while Group 3 and NYMEX RBOB fell ~16¢. The Chicago Spot is now dead even with Group 3. With a spike up in spot prices the last two days, we are now in Spike territory in Indiana, Michigan and Ohio. Expect the possibility of a spike tomorrow, with the slight chance that it will hold off until the weekend of after.
With the numbers not posting before I left work, and having an 18 month old to contend with when I got home, I did not finish my numbers until this morning. It wasn’t the only thing I forgot yesterday.
We are in spike territory as of last night. Prices have been falling into the $3.40s on the low side in most places, and the spot was following it down. There was a bump up in the spot yesterday which has caused the spike line to be crossed. Look for prices to spike up (if they haven’t already) as it’s also a Thursday, the most popular spike day of the week.
Monday, March 7, 8:00AM: Although retail prices rose to $3.55 last Wednesday (as I suggested a week ago), wholesale prices continued their relentless climb, fueled by the spike in oil prices, the weaker dollar, and the switchover to “summer gasoline” that is in progress. According to AXXIS, the wholesale price for a gallon of gas was $2.88 on Friday, while according to NYMEX, it is more like $3.05. The truth is probably somewhere in-between, and it leads to a 0-cent margin price (my estimate of the cost to the gas station owners) of somewhere around $3.50. So, I believe there is one more price hike coming, to the neighborhood of $3.69. Then, I think (hope?) that will be it for a while.
The only thing that could keep us from a spike tomorrow is history. Wednesday is not a usual day for a spike. We could hold off until Thursday, but with the NYMEX seeing massive spikes up, over $3 for the RBOB, and over $100 for oil, it’s not if, it’s when we will get a spike.
The Chicago market did not see big jumps, but they could come tomorrow.