USA Today Predicts $3 a Gallon. Really?

Comment on the June 12 prediction:  We’ve had no hike since June 12, and prices were at or below $3.69 last Monday, so the prediction was CORRECT.

Saturday, June 23, 2012, 4:00PM:  Yesterday’s front-page headline on USA Today screamed, “Gas Prices Could Hit $3 By Autumn“.  For years, we’ve discussed on this site how gas prices have become intimately tied into the stock market, so USA Today might as well have said, “Dow to Fall to 11,000 by Autumn”.  If you really think gas prices are going to $3 a gallon in October, then sell short the UGA fund.

Estimating the wholesale price to retailers using publicly-available data, we can try to predict gas prices a week from now, though, and my prediction is LOWER.  Based on Friday’s close, retailers in west Michigan should be paying around $3.20 a gallon right now, down from $3.68 on June 12.  So, retail prices have a long way to fall from the $3.50’s that I am seeing as I drive around.  Don’t be in a rush to fill up the next several days. — Ed Aboufadel

Updated: June 23, 2012 — 3:54 pm


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  1. Since my last post, both the uncompetitive on DIESEL Speedway and its competitor across the street have dropped to $3.599. The last two times the competitor dropped its price, it took that Speedway about 2 weeks to match the price.

    The Chicago spot finished Friday up 2.12¢ (0.84%) to $2.5363. That moved the Michigan spike lines to:

    $3.313518 without a rack adjustment, plus 10¢ summer surcharge
    $3.213518 without a rack adjustment

    With the Michigan retail average currently $3.525, the no-surcharge spike line has a 31.1482¢ cushion. It’s looking increasingly likely that the next reset will occur on Monday, July 2, unless Speedway decides to surprise us this Thursday.

    Retail Averages:

    $3.528 Grand Rapids (lowest $3.379 at 2 locations in Hudsonville)
    $3.525 Michigan (lowest $3.059 at 1 Stop in Flint)
    $3.511 Cincinnati (PRICES CONTINUE TO BE HIGH FOR AN OHIO CITY, highest in Ohio)
    $3.428 Kalamazoo (lowest $3.349 at 6 locations on Stadium Dr. and S. 9th St.)
    $3.405 Ohio (lowest $3.029 at Starfire in Martins Ferry)
    $3.403 Indiana (lowest $3.159 at Admiral in Monticello)
    $3.388 Champaign (lowest in Illinois)
    $3.378 Milwaukee (lowest in Wisconsin; normally, Milwaukee is highest in WI)
    $3.373 Fort Wayne
    $3.337 Flint (lowest in Michigan)
    $3.319 Toledo (lowest in Ohio)
    $3.237 Evansville (lowest in Great Lakes; no Speedways in this area)

  2. I’m one who is helping keep prices down. I don’t do any unnecessary driving except to the grocery store.

    My theory is if they can’t sell gas the prices are bound to drop

  3. Good work Norm. Not buying any gas at all is definitely the most effective thing an individual can do to lower prices. However, there are millions of new middle class Chinese to offset your declining use. This past Thursday (June 21) was the 7th annual national Dump The Pump day, which encouraged people to use public transportation (city buses) to get to work. I didn’t even hear about it until after the fact. About a decade ago, Kalamazoo would have offered free bus rides on such a day, but not anymore.

    If you get excited about buying gas for $3.399, I will remind you that was Speedway’s peak price on Thursday, September 1, 2005 during Hurricane Katrina:

  4. So when you say a reset how high are we saying? Would it go back up to 3.89 again?
    I saw that on the stock market it was down to 78 will that ever get to us?

  5. By following the time-honored ‘bang the close’ of oil price method for the daily pricing it looks like it’s headed back to 79-80… Keep in mind that all we need for 90+ oil is a few days of ‘tension’ in Iran / Egypt / et al. and that’s all she wrote, 3 days out of 5 with $3 type hikes and ‘escalating tension’, throw in a ‘grew less than expected’ type API figures, and that’s it.

  6. Andrew, Traverse City, MI

    With how low the spike line is. It seems like it would be another few more weeks before another spike since they go down just a few cents a day. It is currently around $3.399 a gallon here In Traverse City, MI. But of course it will be the fourth of July so they have to reach into our pockets again and gouge.

  7. Turbo, my sentiments EXACTLY!
    I’ll take gas at 3.45…thats OK with me. If it goes below three then that usually would mean the economy is going down the crapper. I don’t think it will on either accounts but hey, 3.25 would be nice!
    One indicator though is one of our customers at the CSX Grand Rapids yard. They unload 110/130 octane low lead aviation fuel and heve been going thru that at a rather decent rate of late. Seems someone is flying their planes about these days! Unloading a 30,000 gallion tank a day and trucking it to various airports. Comes out of a refinery in the Minneapolis area.

  8. I’m doubtful of a hike in the coming days. Even so, if we do see an attempt for the 4th of July, it will most likely be short-lived.

  9. Last night, I noticed the uncompetitive on DIESEL Speedway and its across the street competitor were both down to $3.559. So, after two occasions when that Speedway did not match its across the street competitor for about two weeks, it has matched the past two decreases with lighting speed.

    The Chicago spot finished yesterday up 1.47¢ (+0.6%) to $2.4779. That moved the Michigan spike lines to:

    $3.251614 without a rack adjustment, plus 10¢ summer surcharge
    $3.151614 without a rack adjustment

    The Michigan retail average is currently $3.474, giving the no-surcharge spike line a 32.2386¢ cushion. Yesterday, the average of all Speedway stations in Michigan was 4.43¢ lower than all stations of all brands in Michigan. That makes the Speedway cushion over the spike line 27.8086¢. Ignoring Wednesday, July 4, that would put the next reset at Friday, July 6, which is not a typical day for Speedway to reset. I would still be prepared for a reset on Monday, July 2. If that reset were to occur, I would suggest $3.399. Yes, the reset would be “short-lived.”

    This Friday through Sunday, participating Burger Kings nationwide will be selling original chicken sandwiches for $1.04, to celebrate Independence Day. No coupon necessary.

  10. The competitor has gone down to $3.539 for DIESEL this afternoon. Speedway remains at $3.559.

    The 2:34 p.m. update shows the Chicago spot down 3.44¢ (-1.39%) to $2.4435. This moves the Michigan spike lines to:

    $3.21515 without a rack adjustment, plus 10¢ summer surcharge
    $3.11515 without a rack adjustment

    The Michigan average is now $3.468, 0.6¢ lower then when I last posted 3.5 hours ago. The lowest retail price currently reported in Michigan is $3.009 at Shell, G-4310 Corunna Rd. in Flint. The lowest price in Indiana is $3.059 at Admiral on W. Jefferson St. in Franklin. In Ohio, 9 stations in Sandusky, Martins Ferry, and Milan are reported at $2.949–$2.999.

    Since the wholesale price continues to fall, I no longer think there is reason to worry about a pre-Independence Day reset (Monday, July 2). I think you can expect the next reset to occur on Thursday, July 5, unless something causes the market to surge up before then.

  11. Here is the latest excuse why we will have a gas hike probably before the holiday next week [my prediction only and because yes, it is a holiday].

    Oil jumped to above $80 a barrel Friday, bouncing off an eight-month low after European leaders agreed to use the continent’s bailout fund to funnel money directly to struggling banks.

    By early afternoon in Europe, benchmark oil for August delivery was up $2.81 at $80.50 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $2.52 to settle at $77.69, the lowest close since October, in New York on Thursday.

    Full article here:

  12. I will be surprised if the “optimists” don’t use this as an opportunity to bring WTI back into the 90’s – one piece of “good” news, one from Iran, and so on.

  13. And here is where oil closed today – up $7.



  14. I predict a price reset tomorrow. Why? They have the loyalty program for the speedy rewards and in the past, every time they have done one of these programs, prices have gone up on the first day of it.

  15. Sam, David, Diether … you know it — you saw what happened yesterday with wholesale prices. See my new post in a few minutes.

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