The game is being played at $3.99 right now

Thursday, March 22, 2012, 9:15AM:  Well, to be an optimist, at least the relentless rise in wholesale and retail gas prices that started at the beginning of February seems to be tapering off.  NYMEX futures prices have been stable since March 9, while Chicago wholesale prices have stayed flat for more than a week.  Based on my calculations, though, retailers are paying about $3.99 a gallon for their gas, which means that prices could drift down to $3.89 (what I call the 0-cent margin price) or re-set to $4.09.  Clearly, Big Red and friends are reluctant to push prices over $4 in the area.  They tried in Indiana the past weekend, but it didn’t stick.  Hard to predict if they take another shot at $4.09 or not today or tomorrow.  –Ed Aboufadel

Posted in Commentary, Predictions
6 comments on “The game is being played at $3.99 right now
  1. Bill Eby says:

    Most of Indiana went to $3.999. The 3 Northwest counties selling RBOB gas did go to $4.359. The RBOB spot is going for 35¢ over the regular Chicago Spot, so I can see why they did this. Judging by, everyone there is still over $4, so this hasn’t eased, yet.

  2. Diether Haenicke says:

    The Chicago spot market for conventional gasoline fell 5.75¢ (-1.74%) today to $3.2396. This drops the Michigan spike line to $3.743716 ($3.959016 without the massive -21.53¢ rack adjustment). New York April futures for reformulated gasoline fell 1.75¢ today to $3.3396. The Michigan average is now $3.982. The national average is $3.856.

    According to Patrick, Muncie, Indiana also briefly went up on Tuesday, like Fort Wayne. The price in Muncie was $4.199. All stations but one in Muncie are now reported at $3.999 or below. It is of note that Muncie has 4 Gas America stations, among 88 Gas America stations in Ohio and Indiana Speedway is purchasing (or has purchased). In addition, Muncie has 3 Speedways and 1 Rich, so Speedway is doubling their presence in that community. With 8 stations, Speedway now owns (or will soon own) 21% of the 38 gas stations in Muncie, Indiana (about 1 of every 5). Their share of the market, based on sales, might be higher or lower. It would be interesting if someone came up with a share of the market percentage that Speedway has to own before it becomes a “Speedway Effect™” town. While Marathon owns Speedway, Rich, and Gas America, Marathon brand stations are independently owned. Muncie has 14 Marathon brand stations, 37% of the locations in town. The largest brand competitor in Muncie (based on number of locations), is Shell with 4 (11% of the market). Muncie has 3 BPs. There is only 1 each of Admiral, Murphy USA, and Meijer.

    This doesn’t seem very useful, but here is a new GasBuddy toy: www DOT gasbuddylive DOT com. You can watch a map of the USA as reports come in from GasBuddies across the nation. It’s not useful because you can’t click on any of the numbers to get specifics, you can’t stop the numbers from coming in, and you can’t zoom in. It would be sort of useful if you could zoom in on the Great Lakes and see only reports from Speedway locations.

    Here are some important headlines from Patrick:

    * “EIA: Crude and gasoline inventories fall ahead of summer switch”

    * “Great Lakes folk- brace for more increases”

    Patrick was on ABC’s Nightline Tuesday night:

  3. Turbo46032 says:

    To quote a proverb I learned while traveling overseas, “we are not poor for little money, we are poor for big money”. The argument that we can save 20c a gallon while avoiding a spike is good, and on a 10 gallon fillup it’s $2.00, or 4.00 a week for two cars, or $35-40 a month. On a 20 gallon a week (2 cars) times 4.5 that’s what, 90 gallons, or $360.

    The issue is not saving $35, but having to spend $360 in the first place. And the oil companies know this. I am sort of reminded or airfare shopping… Sure, some obscure site has a $500 ticket for $480, but the deals of times past are gone.

    Right now we’re paying pretty much what we were paying in 2008 with oil at $140+/bbl… The moral satisfaction of saving $4 in a fillup quickly evaporates once we realize that thanks to continuing price increases, last week’s post-spike price is next week’s pre-spike price, and so on.

  4. TimmP says:

    Funny (not really)! DOW gains 40 points, Oil up $2. Dow loses 80 points, oil loses $0.23. Somebody really wants badly to know just exactly how much they can get out of this turnip.

  5. Diether Haenicke says:

    The Chicago market for immediate delivery conventional gasoline finished Friday UP 4.56¢ (+1.41%) to $3.2852, erasing most of the prior day’s decrease.

    This week’s Michigan rack adjustment was a huge -21.53¢. Like last Sunday, I am curious what this week’s number will be.

    The current Michigan retail average is $3.956, with prices in Grand Rapids as low as $3.879 in Lowell. In Kalamazoo, $3.899 is the lowest price.

    Right now, it seems like the quiet before the storm that will take us up to $4.259-$4.499 in May.

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