Spike likely again early this week.
25 comments Monday, 02-27-12 | Posted By Bill | Predictions
We have been across the spike line for quite some time. I thought the spike up in prices last week was pretty strong, but it wasn’t enough to put us back in the positive. Therefore, I’ve been waiting on pins and needles for another spike to happen.
I don’t expect us to cross the $4 barrier yet, and stations are usually reluctant to do so. But I can see us pushing at or near $3.99, probably falling in the $2.85-89 range either today or tomorrow. Keep an eye on the comments of this thread for when the spike finally comes.
A spike to $3.85 appears to be in progress. The Speedway in Wayland, followed by the Speedway in Frandor in Lansing, were among the first stations reported at $3.859.
I am seeing 48% of Indiana Speedways up to $3.85, 80% of Michigan Speedways to $3.85. ad 95% of Ohio Speedways to $3.79. If you can find it cheaper, full up now!
Greedway $3.799 has been visually confirmed in Cincinnati, Ohio.
Then I guess Big Oil never learned a thing from 2008. Go far beyond $4/gallon and even the staunchest pro-free-marketeers will join in the chorus…
A lot of the price increases in crude, besides the unrest in the Middle East, are due to QE2. It is coming to roost as inflation in the prices of commodities, no doubt. But remember, the new government calculations of inflation no longer include Food or Energy so it really isn’t costing us (officially).
A month ago, I had told my friends and family half jokingly, that I expected oil in the Indiana, Michigan, and Ohio markets to climb over $4 a gallon by Easter. I then said that I probably would be wrong. I think now that I am wrong. It will probably be quite a bit prior to Easter.
SIGH!
But maybe, that means it will come down a bit more by the summer? Hope lives on, I suppose.
Summer is ‘the driving season’ so it is my expectation prices will only increase ad people want to spend their time away from home. Let’s hope vacationers have the sense to stay at home and drive gas prices lower. I have curtailed all unnecessary trips in hopes of forcing prices down.
This is an interesting read and a map that looks kind of like the GasBuddy retail price map, except it is Crude Oil pricing. And Crude from Canada is cheapest.
http://www.embargozone.com/2012/02/25/gas-could-easily-go-to-5-and-crush-the-national-economy/
We had no QE2 in 2008 and yet we managed $149/bbl (and ironically, a lot more restrained gasoline prices for what crude cost). Poor Big Oil, they even had to dig thru the playbook to find reasons other than ‘winter gas changeover’ and ‘fire’ (hence, Smart Pigs, squirrels, and so on).
Right now, we have the perfect storm of high oil prices and refinery shutdowns, and we’ll be hitting 4.00+ by end of March… My hope is to charge thru straight to 5.00 at which point someone will notice (say, get rid of the Commodities Modernization Act etc)…
Speaking of price gouging there is a station just north of Orlando, FL that is two dollars higher a gallon than the surrounding stations. It’s the last station north of the airport.
$3.999 coming any day now. Today perhaps?
RBOB contracts rolled over, creating a 20 cent increase.
In Ohio, we are trying to start a boycott of Speedway gas stations. If they start feeling some loss of sales, maybe they’ll end their practice of huge gas price spikes. Look at the bright side of these high fuel prices… They should guarantee a new President, hopefully the next one “Gets It”…
Speedway spikes transcend politics… We had oil spikes throughout the George W. Bush administration, an administration that had serious experience in the subject of energy policy. Besides, after nearly 20 years of spikes, we have gotten really good in not noticing the spikes any more. Sort of like Midwestern weather.
$3.999. You called it!
3.999 in Ottawa, IL this afternoon per my son. Also at 3.999 at Meijer in Lewis Center, OH (just north of Columbus).
Re the real truth;
I haven’t done business with Speedway in quite some time. Other’s prices always seem to be somewhat lower. They have a monopoly in the Midwest and are taking advantage of it. They are the ‘plague’ of gas prices.II
I don’t buy from Speedway. My experience is that one time back in 1999, I bought a tank at one, and the next day, I had to change all my fuel filters. Then one time in 2005, I bought a tank from a Speedway in Fort Wayne, and the next day, I had to add 3 bottles of injector cleaner to the tank. Lots of people bought gas and still do from those two stations, but I don’t, and I don’t even buy from the brand. And I have changed over to a couple other stations that are at or cheaper than Speedway and have had no issues since. Weather all the stations are waiting for Speedway to raise their prices, or if Speedway is driving the prices, the fact remains that states with no significant market share of Speedways, don’t see these wild swings.
I actually go to Speedway all the time, the cheepest gas I can find near Grand Rapids, Mi is always at a Speedway. Can you explain why everyone is so aginst them, when over here on the west side of Michigan I dont find this Speedway thing true?
I have to admit, I’ve been a regular at Speedway. But only for gas. I’m not a big fan of CS prices or products, although I get the occasional free soda with my rewards points at Speedway. I find that while Speedway sometimes sets the trend on the way up, they follow the trend on the way down, so they are competitive in price. There have been times recently where they are actually the low price leader in their area, believe it or not (although a few of the most recent spikes didn’t seem to originate from ALL Speedway stations).
I have never had a bad tank of gas from them.
Speedway may be ‘competitive’ on the downswing, but there is no point in rewarding such behavior. Even tho the numbers suggest we may benefit on the downswing, the issue is that we’re being conditioned to expect wild swings and somehow don’t see the price increase trend.
If we were slow and steady, a month ago I might have paid $3.30 and now it’s $3.75. But add the spikes and a month ago, OMG, it was $3.69, then down to $3.35, back up again, ad infinitum, and now $3.99, OMG, back to 3.75, life is good. We completely skipped over any thoughts of a price increase as our sense has been numbed by the constant price changes.
In my area Meijer seems to have picked up the baton, and I have stopped buying gas there as well. Of all companies, Meijer should NOT be doing it because they have a real store to help with their margins. Not good enough I guess.
So I fuel at Costco 99% of the time. Costco is not exactly clean from blame itself in my view, their zone pricing (following) is atrocious, but they are considerably more stable than everyone else around them.
The spikes are not the only problem we have; zone pricing has become quite the issue here in Indianapolis. But companies with predatory anti-consumer pricing deserve consumer scorn, regardless of the actual impact to ‘astute’ buyers.
@LynnL – are you kidding me??? Meijer [w/credit card & 5 cents off] and/or Costco/Sam’s are ALWAYS the cheapest prices in town. Speedway in Grand Rapids is ALWAYS the first to go up on any given spike – ALWAYS. If your Speedway is the cheapest, you must live on the SE side of town where the gas prices are always about 20 cents lower than most other places around town. Like today.
Prices at some west Michigan locations may fall to $3.699 on Monday. If they reach that price, a 20–30¢ reset will probably follow on Tuesday, but that is really too far out to predict.
I’m hoping prices won’t go up until next Thursday, because on January 4 I predicted prices would go to $3.999 on Thursday, March 15. Here is that prediction: http://www.thegasgame.com/2011/12/30/this-week-notwinning-the-gas-game/#comment-3438
In the Kalamazoo area, the lowest price is $3.799 at 3 locations downtown. The price is $3.789 at the BP in Richland. The Kalamazoo metro average is $3.866.
The lowest price in Grand Rapids is also $3.799, available at 5 locations in Kentwood, 3 locations in Wyoming, and 1 location each in Grand Rapids, Comstock Park, and Cutlerville. The Grand Rapids metro average is $3.865.
The Michigan average is $3.849. The national average is $3.717.
April New York gasoline futures are up 1.25¢ this morning to $3.2999. May New York gasoline futures are up 1.64¢ to $3.3002.
The lowest reported price in Michigan is $3.569 at Kroger in Lambertville, which is apparently trying to attract customers from nearby Toledo, Ohio, where the average price is $3.63 and the lowest reported price is $3.469. The Michigan stations nearest Lambertville are $3.699 and $3.799. Gasoline retailing on the Michigan side of this area must be difficult, because there are probably 50 gas stations on the Ohio side, but only 7 on the Michigan side. The difference is caused by lower Ohio state taxes and probably the fact Toledo is a large population area compared to the rural area on the Michigan side of the border.
Speaking of Sam’s/Costco, we only have a Sam’s here in Fort Wayne, on the near north side, and it almost always is the lowest priced in the region. Today, it is lowest by a couple cents. It is only ½ mile each way our of my way to and from work so it is very often considered. It’s gasoline is unremarkable, not the best I can buy (my usual stations will give me about 10% better mileage than Sam’s), but it has never presented an issue for me. Ever. AND they will hold their pricing during spikes for at least till closing of business on the day all the rest go up by 30¢. The next day, maybe they only went up 20¢. I give them a good solid A for effort in a wild pricing market. Just ½ mile from my work is three stations usually locked in mortal combat for prices. CircleK/Shell, Speedway, and Kroger. Speedway almost never is leading the way to lower prices, Kroger leads. Shell follows, and then Speedway reluctantly falls in line. But on spike days, there is Speedway at 10:00 AM or so, price up, and the other two holding till mid afternoon or later. I have been watching station pricing for almost 40 years, and this type of Rocketing up of prices and feathering down of prices for 30 years, while under $1 gas was going up by 5¢ and falling slowly back to (almost) normal. Speedway was the driver of this then. They were bought by Speedway, and it continues to even a more sharp degree. It all masks the real pricing and direction of prices under the wild swings. PLEASE, thank the keepers of this site. They have brought sanity to our minds of why all this happens as it does. Sorry about the length of this post.
Sorry, above I said that Speedway drove prices 30 years ago, I meant to type Checker. Checker appeared to drive the price resets back then.
Norm wrote: “Speaking of price gouging there is a station just north of Orlando, FL that is two dollars higher a gallon than the surrounding stations. It’s the last station north of the airport.”
—– We’ve discussed that station before. It is typically the highest priced station in the United States. It is currently reported at $5.899. That Florida station apparently does not have its prices posted on a sign visible from the street. It it able to charge such a high price because it is taking advantage of unaware tourists returning rental cars. We have the same thing in Michigan at the BP next to Detroit Metro Airport, which is typically the highest priced station in the state, currently reported at $4.199, 35.1¢ above the state average.
LynnL wrote: “I actually go to Speedway all the time, the cheepest gas I can find near Grand Rapids, Mi is always at a Speedway. Can you explain why everyone is so aginst them, when over here on the west side of Michigan I dont find this Speedway thing true?”
—– West Michigan is the epicenter of “The Speedway Effect.” Everything you read on this blog about Speedway applies more to west Michigan than anywhere else. So, it is not surprising that this blog is based in Grand Rapids. “Everyone” is “aginst” Speedway because they “always” raise prices first, which is largely true, but I have documented and posted to this blog occasions where some independent west Michigan retailers have raised their prices before Speedway. However, when independents do go up before Speedway, they typically only go up to cost, not a full 20–25¢ mark-up that Speedway does. So, an independent would go up to cost today, and tomorrow they would go up to whatever price Speedway has set as the new standard.
As far as you seeing the lowest prices at Speedway, that’s because there are nearby competitors that went to that lower price first. In west Michigan since year 2000, I’ve never seen an occasion where Speedway lowers prices first. They only lower prices in response to a competitor lowering prices. Speedway is quite quick to respond, like within 90-120 minutes, so you may never see the brief period before they’ve matched the competition.
Bill Eby wrote:
“I find that while Speedway sometimes sets the trend on the way up, they follow the trend on the way down, so they are competitive in price.”
—– I completely agree.
“I have never had a bad tank of gas from them.”
—– I completely agree. I’ve bought thousands of gallons of gas from numerous Speedway locations and never had a problem. The only place I’ve ever purchased bad gas was a BP (when it was branded Amoco). As a result, I rarely ever purchase gas at BP/Amoco stations. It is obvious Speedway and Shell stations try to stay clean looking. I don’t know about your BP stations, but a lot of the ones I’ve seen are pretty dumpy and dirty. It is obvious Shell’s franchise agreement requires stores to be kept clean and in good condition. It is obvious BP/Amoco does not require the same from its franchisees. There is also nothing wrong with the cleanliness of Meijer stations, but given the choice of fuel at the same price, at least Speedway gives me Speedy Rewards, which I like to redeem for the $25 gas card. The best time to redeem your Speedy Rewards for the $25 gas card is around Xmas, because they sell the cards for $24 then. So, when I’ve redeemed my Speedy Rewards, I get a $25 gas card plus $1 cash.
The one time I had a problem fueling at a Speedway, the pump did not automatically shut off when the tank was full. I did not immediately notice and it spilled like 2.5 gallons of gas on the ground. I explained this to the cashier and the overflow was deducted from my total, without hassle. There was another problem with one of their stations that I reported through their website. I was delighted that the problem was remedied quickly and to my satisfaction.
My only dissatisfaction with Speedway is you used to get to use the air pump free if you made a purchase. Now, it is like $1 to use the air pump. Many gas stations (of any brand) used to offer free air. Now, the only place in Kalamazoo County I know of that offers free air is Belle Tire stores.
4:47 p.m. Thursday
PRICES WILL INCREASE TOMORROW (FRIDAY, MARCH 9).
Cancel my earlier prediction that prices were going to continue falling through Monday. The Chicago spot market closed today up 12.16¢ (3.93%) to $3.214. That makes $3.87868 the new spike line, which is 3.568¢ above the Michigan average of $3.843.
Normally, I’d say prices are going to $4.099, but that $4 barrier is one to be avoided and competition will bring it quickly back down to $3.999. I don’t know if we should expect $3.999 or $4.099. Either way, prices will most certainly increase tomorrow beginning at 10 a.m. ET in significant portions of Michigan’s lower peninsula, Indiana, and Ohio.