Wholesale gasoline prices drop 25 cents today. Speedway, it’s your turn!

Thursday, May 5, 2011, 9:30 PM:  Wow.  I wrote Tuesday night about the plunge in silver prices, “don’t be surprised if gold is next, then oil and gas, and then stocks.”  I wasn’t predicting that this would happen this week!  Today, though, as you may have heard elsewhere (including in the comments of our previous post), wholesale prices dropped about a quarter dollar a gallon, and unprecedented one-day drop, and gold and stock prices were down, too.  Will this continue on Friday?  That isn’t the point of this web site.  The point is to predict that retail prices will start dropping significantly, perhaps starting tomorrow, heading for below $4 a gallon.  So, c’mon Speedway and friends, you love to pass along those wholesale hikes.  Time to pass along this steep drop! — Ed Aboufadel

Updated: May 5, 2011 — 8:18 pm

7 Comments

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  1. ChrisDG74, Cincinnati, OH

    You’re joking right? Dork the Ork at GREEDway is probably pleasuring himself over these higher margins he can get now.

  2. LOL- fat chance in hell of THAT happening – they will keep raping the public for as long as they can!!

  3. Diether Haenicke

    I don’t think Speedway ever leads prices down. They just match when the competition lowers their prices. So, everyone follows (or waits for) Speedway on the way up (especially in Kalamazoo and Grand Rapids), but Speedway follows everyone else on the way down. One reason for this is the Speedway hikes come from the corporate office in Ohio while the drops are decided by local Speedway managers, based on their nearby competitors.

    *****

    Yesterday, GasBuddy recorded a national average of $3.958.

    AAA reported a national average of $3.985 yesterday.

    Both will hopefully be the peaks for the year. Other than having reversed digits, I note these averages are different by 2.7¢. Do you think that is a significant difference? Why do you think the averages are so different? Which do you think is more accurate?

    It would seem easier to come to agreement on a national average for gas prices than it would on a global temperature, where the differences being argued over are about that amount (in Celsius).

  4. Diether Haenicke

    Competition has forced all but 2 Speedways in Southwest Michigan (both in Coldwater) to come down from Monday’s $4.299. As of this morning, there were something like 10 Speedways still at $4.299.

    At the moment, the lowest Speedways in Southwest Michigan are in 2 in Allegan at $4.089, a city that has had a Phillips 66 at $3.999 for a few days now (with a $20 per customer limit). I’ve never seen that kind of deal on gas before, getting headlines for a well below cost price (among lowest in state), but putting a limit on how much can be purchased. You get the promotional benefit (for your convenience store) of the headline making low prices, without suffering huge losses. Congratulations to them for coming up with a unique solution, like when grocery stores put a limit on their loss leader items.

    If you’re looking for another contrarian view on falling oil/gas prices:

    “Analyst Peter Beutel thinks there is only a 20 to 25% chance that prices have peaked – that this might just be a blip. He believes there is no way of telling how fast the prices paid at the pump will come down.”

    http://www.wkzo.com/news/articles/2011/may/06/conflicting-opinions-gas-prices/

    At the moment, gasoline futures are essentially unchanged from yesterday’s close, up .08¢ Yes, I mean 8 hundredths of one cent. Meanwhile, oil futures have continued down another $2.62 to $97.18.

  5. >>>One reason for this is the Speedway hikes come from the corporate office in Ohio while the drops are decided by local Speedway managers, based on their nearby competitors.<<< Actually corporate makes the decision both ways. They make the jump up when margins are low, but managers call in to report prices locally, and corporate tells them where to set the prices.

  6. Diether Haenicke

    Bad news.

    Gasoline futures are presently up 15.99¢ to $3.2500, from Friday’s close of $3.0901, an increase of 5.17%. Oil is currently up $4.21 to $101.39, from Friday’s close of $97.18, and increase of 4.33%.

    Here is an article that tries to explain Thursday’s massive drops (it blames automated profit taking for a lot of it):

    Special report: What really triggered oil’s greatest rout

    http://www.wkzo.com/news/articles/2011/may/09/special-report-what-really-triggered-oils-greatest/

    Thank you for the correction on who makes the decision to drop Speedway’s prices. In southwest Michigan, the lowest priced Speedways are still in Allegan with both stations at $4.059. After that, the next lowest are $4.089 at the 3 Kalamazoo stations in the S. Westnedge Ave. area plus the one nearest the Kalamazoo airport. The currently highest priced Speedways in southwest Michigan are $4.229 in Bridgman and $4.219 in Bangor. The lowest non-Speedway price currently reported in southwest Michigan is $4.019 at the Marathon on Red Arrow Highway in Paw Paw. Interestingly, this was the only station in southwest Michigan to break the $4 barrier before Speedway (when prices rose to $4.179).

    As of 11:59 p.m. yesterday, the BP in Romulus near I-94 exit 198 was still selling gas for $4.499, still the highest regularly reported station in the state, 10¢ above the second highest, a Marathon in Ontonagon (Michigan’s western upper peninsula near the Porcupine Mountains).

    Current/week ago averages (difference):

    $4.132/$4.276 (14.4¢) – Grand Rapids (a Circle K at 44th St. and Eastern Ave. in Kentwood at $3.999 has forced the nearby Speedway to offer the same price)

    $4.120/$4.283 (16.3¢) – Kalamazoo

    $4.099/$4.238 (13.9¢) – Michigan

    $4.059/$4.281 (22.2¢) – Lansing

    $3.930/$3.941 (1.1¢ decrease) – USA, GasBuddy

    $3.960/$3.952 (0.8¢ increase) – USA, AAA

  7. Oil 102.54 +5.36 +5.52% – Off Yahoo Finance

    New that “plunge” would only last about 5 minutes. So prices falling through Memorial weekend will NOT be happening folks!!

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