Wednesday, August 31, 2011, 7:15AM: I just updated my spreadsheets, and we’ve had noticeable jumps in oil and gasoline futures the past few days, while retail prices have been sinking slowly. I estimate the 20-cent margin price to be $3.86, so expect a price re-set to $3.85 either today or Thursday. — Ed Aboufadel
Month: August 2011
Comment on the August 18 posting: Prices did fall into the $3.40’s in some places, before the hike on Wednesday the 24th.
Friday, August 26, 2011, 12:40PM: The price hike to $3.85 on Wednesday was a bit ridiculous (and unexpected), and the way to judge an overdone hike is to see what happens the next 48 hours. In this case, some places never went to $3.85, and today we are back in the $3.60’s in several areas around Grand Rapids. Why the hike? Wholesale prices did jump a bit earlier in the week (and, I’m troubled to say, again yesterday), it seems like there is a push for higher margins at Speedway and friends this month, and we’ve got some hurricane-related jitters. An example of these jitters is an unexpected e-mail I received this morning, selling OPIS news alerts, with warnings about east coast refiners that could lead to “turmoil”. A good time to be contrary is when there is panic in the air.
What I really want to write about today, though, is this front page story in yesterday’s Grand Rapids Press: Who Knows What Oil Will Do, by Ursula Zerilli. Part of the article touched on themes we’ve been hammering on this site for years: volatile futures markets, speculation by investors reflecting a broken market, low profits on gasoline for station owners. (Refinery owners and big oil companies, on the other hand, are doing just fine.) But, are you calling out this web site with quotes like this one: “One thing about predicting gas prices is there is no way to predict.” ?! It’s true that predicting what prices are going to look like a month from now is pretty tricky (if I were to guess: lower), and at the moment, we could get a hurricane-fueled price hike on Monday, or not. August is the trickiest month. But most of the time, we can make accurate predictions about price hikes and price drops. As we continue through our 11th year of The Gas Game, we’ll do our best to help you out. –Ed Aboufadel
After a mini-spike yesterday, some stations have gone back down, as it wasn’t warranted at the time. Today, BP announced an issue with their refinery in Whiting, IN, and they are closing it down for repairs.
Market prices shot up today. Expect price at your local station to follow suit very soon.
Comment on Monday’s posting: A second WRONG in a row, as prices re-set on Wednesday to $3.69 in the Grand Rapids area.
Thursday, August 18, 2011, 1:50PM: Yesterday’s price hike was not related to wholesale spike, just someone at Headquarters wanting to get those margins back up again. As I noted the other day, it looks like we are seeing more aggressive pricing this month to increase margins. Sorry for the WRONG prediction. Of course, the day after the hike, we have a harsh decline in the stock market, which means wholesale prices are also falling. At the moment, the Gasoline ETF with symbol UGA is down 3%, so that would translate to about a 10 cent drop in wholesale prices. So, retail prices will be down a dime tomorrow, right? Maybe — I see we are $3.61 in Jenison this afternoon. The point is there is now pressure on retail prices to go lower the next few days.
Hi, long time, no post. Usually, that’s a good thing, as I post to warn you when I am sure of a spike up in prices.
Lately, I’ve been off on catching spikes. They have come about 5-10¢ too early, and have not been as strong, or as uniform. Thus, they have been hard to predict. I think someone has decided to change the game.
Last night, I predicted in my daily posting on GasBuddy that the possibility was there for a reset today. And it happened. I’m not ready to change my calculations to reflect this, although my automatic suggestions on my GasBuddy pages, and here on the Spike Line page on this website have been adjusted to more readily catch a spike.
I hope in the future to continue to post less. But if I do, I hope to be doing so to warn of an impending spike, so you can save some money.
Comment on the August 2 prediction: A heaping pile of WRONG, as prices jumped to $3.89 on August 3. We had another re-set this past Friday to $3.75.
Monday, August 15, 2011, 11:40AM: I’m back from traveling to Kentucky and Traverse City. In ten years of the Gas Game, it seems like August is more likely than not the worst month of the year for gas prices. It is usually a combination of higher demand for gasoline due to vacations, surprise shortages due to hurricanes and refinery fires, and the “summer rally” on Wall Street. This year, I haven’t seen evidence for shortages, and we’ve seen the stock market sell off sharply the past few weeks. That sell-off has affected oil prices, but not wholesale gas prices. For instance, according to the Bloomberg page for wholesale gas prices, we were at $3.02 on July 28, and only $2.82 on August 10. At the same time, wholesale prices have not been going up. So what I see about this price hike on Friday is that (1) Speedway and friends are trying to increase their margins (more like 30 cents than 20 cents in the formula on the Gas Game web site), (2) because the hike isn’t based on a wholesale spike, it hasn’t held in some areas ($3.50’s in Standale this morning). Going forward, I estimate the 0-cent margin price to be about $3.45, so that’s our floor for prices right now. You can buy gas for $3.50 in Cedar Springs, $3.53 in Standale, $3.66 on 28th street, and $3.75 in places that hiked on Friday and haven’t corrected yet. So, I predict that we should see prices drift into the $3.50’s most everywhere this week, unless we get a wholesale spike that I am unable to predict. If so, all bets are off. — Ed A.