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