Comment on the July 29 prediction: Prices rose the next day to $3.79, so the prediction was CORRECT.
Sunday, August 12, 2012, 10:20AM: $4 a gallon is back. Booooooo!!! At the end of last week, we were having trouble with the web site, and we are sorry about that. I also wasn’t quite focused on what was going on. I should have listened more closely to my brother when he called me on Friday morning, saying he heard about more refinery fires and a hike of at least 25 cents in the making. I told him that was old news, from two weeks ago, but he was right. Here’s a quote from a news story: “In the past few weeks, pipelines serving Wisconsin and Illinois ruptured, refineries were shut down unexpectedly because of equipment problems in Illinois and Indiana, and a blaze broke out at a refinery in Richmond, Calif.”
Add to this how the drought has caused a jump in ethanol prices, and did you notice the S&P 500 is back over 1400? We continue to make the case of the close relationship between stock prices and gas prices, and we see it again this summer. Some hopeful signs, though: (1) August is usually the high point of the year for gas prices; and (2) when my brother calls to talk to me about gas prices, that usually signals a top. We’ll see. –Ed Aboufadel