Spike coming… but how high?

I don’t have a lot of time, so let me quote Diether Haenicke, posting from the comments in my last post:

—–
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.
—–

I think he hit it on the head as that was exactly what I was thinking. Except for one possibility. It may hold off until after the weekend. Hey, stranger things have happened.

Posted in Predictions
9 comments on “Spike coming… but how high?
  1. Wildcat says:

    As a precaution I went out and filled up at around 8:00pm this evening. However…checking GasBuddy before I left, prices at the handful of stations I passed had actually dropped by a few pennies. The Speedway I filled up at was $3.77 (or $3.74, as this station gives a 3 cent discount for Speedy Rewards), but GasBuddy from six hours prior had it as $3.79. The Meijer across the street was also $3.77, and $3.79 earlier today.

    I have a feeling they’ll go up tomorrow, or they’ll hold off until Monday and possibly hit us harder.

  2. Diether Haenicke says:

    10:18 a.m. Friday

    Back to $3.999 in Michigan this morning. 100% correct prediction for me (day and price). As I predicted, Speedway didn’t go their full margin to $4.099.

    Here are the first reports in Michigan:

    10:01 Waterford, Dixie Hwy. near Telegraph
    10:09 Caledonia, Cherry Valley Ave SE near 92nd
    10:11 Waterford, Dixie Hwy. near Walton
    10:11 Flint, S. Dort Hwy. & E. 2nd St.
    10:17 Roseville, Thirteen Mile Rd. & Little Mack
    10:17 South Lyon, Pontiac Trl. & Nine Mile Rd.
    10:19 St. Clair Shores, 1 Mile Rd. & Little Mack Ave.

    $3.899 might be the price in Ohio:

    10:20 South Bloomfield, S. Walnut St. & South St.
    10:20 Sidney, Michigan St. near I-75 exit 92

    Indiana went first today, to $3.999, like Michigan. Normally, Indiana is the last of the three states with reports. Normally, Ohio reports first (where Speedway is based), then Michigan, and Indiana:

    9:37 Lafayette, SR-26 E & Progressive Dr. (near I-65)
    9:50 Indianapolis, S. East St. & Edgewood Ave.
    9:54 Plainfield, Cambridge Way & E. Hadley Rd.
    9:55 Indianapolis, English Ave. & Villa Ave.
    9:56 Plainfield, E. Main St. & Dan Jones Rd.
    10:05 Indianapolis, E. 71st St. & Binford Blvd.

    As of 10:29 a.m., none of these new prices are reported on Speedway’s website.

  3. Diether Haenicke says:

    10:53 a.m. Friday

    As of 10:51 a.m., the new prices were reflected on Speedway’s website. Like normal, all locations in southwest Michigan participated, except Sturgis, where the price remains $3.789, due to there being 2 Admiral stations in that town to keep the 1 Speedway in line (or losing money, according to the current spike line).

    Other non-participating west Michigan locations (these seem like the same locations every time I post them):

    * Jackson, E. Michigan Ave., $3.809 (only Speedway in town with an Admiral down the street)

    * Comstock Park, 4656 Alpine, $3.839
    * Lowell, 1002 W. Main, $3.839
    * Comstock Park, 4121 W. River Dr., $3.849

    * Fremont, 902 W. Main St., $3.799 (1 Speedway town with an Admiral just down the street)
    * Grandville, 4235 Chicago Dr., $3.819
    * Jenison, 1815 Baldwin Dr., $3.839
    * Jenison, 279 Baldwin St., $3.839 (a Meijer is located between these two Speedways)

    * Grand Rapids (9 locations), Wyoming, Kentwood (2 locations)

    * Both locations in Cadillac, $3.929 (main street has 2 Admirals and 2 Speedways)

    * Grayling, $3.809 (1 Admiral and 1 Speedway on the main street; Valero went up to $3.999 as of 9:00 this morning)

    * Lansing, 10 locations, ranging from $3.789 to $3.819

    $3.899 is indeed the price for Ohio, 10¢ lower than Michigan and Indiana. Sometimes it is 10¢ lower, sometimes the same, but most of the time it is 5¢ lower.

    The first west Michigan report of today’s increase was at 10:26 a.m. on Sprinkle Rd. in Kalamazoo by Wings Stadium. It seems like the Kalamazoo reports are relatively consistent in first coming in around 10:20-something. Here are the first reports from other west Michigan cities:

    10:36 Battle Creek
    10:40 Holland
    10:41 Traverse City
    10:42 Wyoming (Grand Rapids suburb)

    Today’s increase was 12.032¢ over yesterday’s spike line. The normal margin is 20–25¢. These 10¢ margins start appearing as we go over $4, especially when the market swings wildly from day to day. Instead of one 20–25¢ increase in a week, we might get 2 ten-cent ones in a week. The game changes during the annual spring rise, which we are now in. The rare Saturday and Sunday resets are possible during this time, which has peaked the first week of May the past two years, though Memorial weekend is often thought of as being the peak.

    On January 4, I wrote: “At this rate, we’ll be lucky to get to Labor Day without seeing gas above $4.499.” http://www.thegasgame.com/2011/12/30/this-week-notwinning-the-gas-game/#comment-3438

    I expected then and still expect now that we’ll see that price sometime during May.

    In that post, I noted that New York April gasoline futures were $2.9191. Those futures are now 40.99¢ higher at $3.329.

  4. Diether Haenicke says:

    A normal, quiet Friday on the Chicago gasoline spot market. It finished up 1.84¢ (0.57%) to $3.2324. Since Speedway only did a 10¢ margin today, we have to beware of a 10¢ up day next week that could finally force Speedway to put up the dreaded 4s.

  5. Diether Haenicke says:

    Marathon Petroleum – Small Engine Fuel Advisory

    http://www.mpcresponds.com/go/doc/4879/1334267/Marathon-Petroleum-Small-Engine-Fuel-Advisory-

    MPC Responds to Fuel Blending Advisory

    Media Advisory

    Marathon Petroleum has identified a product quality situation at one of its terminals resulting in gasoline containing more than 10 percent ethanol in the counties surrounding the greater Louisville area, excluding Jefferson county. Adjacent counties in southern Indiana have also been impacted. Fuel with excess ethanol has the potential to cause small engines such as chainsaws, leaf blowers, generators, lawn mowers, snow blowers, etc., to run faster and hotter than normal, which may result in safety-related issues.

    This fuel should not cause drivability or safety issues with respect to automobiles.

    If you purchased gasoline since March 3 from Marathon Brand or Speedway locations Marathon Petroleum recommends that you do not operate small engines containing this fuel.

    Marathon Petroleum is continuing to identify other retail locations in the impacted areas that may have been supplied with this gasoline and will provide additional information as soon as it becomes available. If you have a concern regarding your gasoline, please contact the retailer to determine if it was supplied by Marathon Petroleum. Consumers who purchased gasoline for a small engine during the time period in the affected area should refrain from using the equipment until they are able to determine whether Marathon Petroleum supplied the gasoline or use extra caution when using the equipment.

    Should you have any questions or concerns about gasoline that you have recently purchased for small engine use, please contact Marathon Petroleum’s representatives at 1-800-892-3418 between 8:00 a.m. and 8:00 p.m. EST.

    Media contacts:

    Shane Pochard Robert Calmus

    Media Affairs Media Affairs

    419-421-4327 (office) 419-421-3127 (office)

    419-306-1578 (cell) 419-348-0748 (cell)

  6. Diether Haenicke says:

    Do you have a second location to look up the Chicago spot price? Bloomberg has not updated since Friday, so I don’t know how things are looking. This is especially important because we are on such a thin margin. Here are current averages:

    $3.975 Lansing
    $3.969 Kalamazoo
    $3.954 Ann Arbor
    $3.953 Grand Rapids
    $3.943 Michigan
    $3.926 Flint
    $3.919 Detroit
    $3.765 USA

    New York April gasoline futures settled down .94¢, but are up 1.34¢ to $3.3364 in after hours trading.

  7. Diether Haenicke says:

    p.s. this site remains on standard time. It is currently 7:23 p.m. EDT.

  8. Diether Haenicke says:

    This article is of no immediate use, but it has some links that may be useful at some point:

    http://www.bloomberg.com/news/2012-01-20/chicago-gasoline-weakens-to-34-month-low-on-shut-sunoco-pipeline.html

  9. Ed Aboufadel says:

    Diether: Thanks for noticing the time issue. I just fixed it.

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