Indiana Spike warning!
28 comments Thursday, 02-14-13 | Posted By Bill | Predictions
With a spike up in the wholesale price today of almost 15¢, and since they didn’t spike earlier this week, Indiana should spike tomorrow. I give it a 95% chance for them. The 5% is only there because historically Friday is not a spike day.
Michigan is also over the spike line, although they spiked on Monday, so I have them pegged for a 65% chance of a spike tomorrow, as two spikes in a week usually doesn’t happen.
Ohio is not over the spike line, and this have only a 40% chance of a spike, mostly due to other areas having a chance to spike.
Better change Ohio odds to 100%. The jump to $3.859 has already begun. Surprised it’s not higher. Probably setting us for another one Tuesday.
Looks like the jump to $3.95 is starting at Speedways across Grand Rapids!!!
Next jump will probably take us to the $4.09 range. Damn is it summer already?? That makes an 84 cent increase in just 5 weeks. So with that, on the first day of spring we should be paying $4.73. Time to start looking for that second job just to pay for fuel.
Low end stations were $2.759 around here 6 weeks ago. Assuming they make the jump, that’s $1.10 in 6 wees.
Enter recession number 5 in t-minus 2 seasons.
$3.95 start in Big Rapids. I am surprised that everyone can refrain from profanity. With the increase in Medicare tax and gas nearly a dollar more than Jan. 1, I am surprised that MSNBC or maybe CNBC announced that retail sales were stagnant: Duh! No one has any money!
Just spitballing here! We all know that “Supply and Demand” for gasoline pricing only goes just so far because after most people back off the 5 to 15% of their driving that they can, what is left is necessary to their jobs, and keeping the household running. Can we assume that most rational people already have or have come close to reducing their driving? I know I have. Nothing left to cut as long a my employer demands I go to the office. Anyway, if that is true, that is people are at their bare bones driving already, it may appear now, to the powers that be, that any increase in the price will not result in less gallons sold. UNTIL, it gets so expensive as to prevent people from buying it. People will leave their cars sit (like this administration would like). Is that $4.50, $5.50, $6.00? I wonder if we will find out this year. I certainly hope sanity returns and we get back to lower $3 gas. Never, ever thought I would hear myself think that $3 gas would be something I would be happy with.
I’d like to use some serious profanity Dale!! Getting hit from three directions now:
1. Gas prices are burning through the roof (duh)
2. The payroll tax holiday expired plus another tax they take out towards railroad retirement went up .5 percent, so I’m a total of 2.5 percent poorer now each paycheck
3. Just found out our “friends” at Indiana & Michigan Electric Power are increasing electricity rates 13% starting next month
Can it get any better???????
What I have trouble understanding is, supposedly we are using less gas than at any time in the last 10-15 years. We are producing more of our own domestic oil since the 70′s, yet the price keeps going up. Is this all in response to the summer blend change over? That’s a month or more away. It doesn’t add up.
Here in good old Flint MI, we were at 3.74 8am this morning, a tiny dip to 3.70 by 1pm 3.95 by 3:30 third hike in 7 days. Flint and much of MI is already on the ropes. 4.00 gas in Feb while NPR is talking major price drops in fuel prices in the coming year. Fuel use is down, No major refinery disruptions and Iran is actually more or less stable. Greed without consequence. Clearly that’s considered to be a working strategy.
Chris, I can feel your pain. My employer got rid of a big machine 4 of us worked on. Job title changed and I lost $1.50 per hour. The next decrease takes place in March. Another $1.50 cut. Once the weather warms up, the car will get parked and I will start riding my bike to work again. Have to save somehow.
I would have expected that high gas prices at the pump were a political weapon for the fall elections. While the Right wing press never failed to blame the current administration, I feel the voters saw right thru that (25% hike in price of gasoline in a month is not something you can pin on a particular individual…)
The current administration, sadly, ignored the situation and continues their la-la-land policies of hands off the energy sector (except for token moves like the pipeline) and printing money. The end result is hardly unpredictable.
Meanwhile, Corporate media are working overtime to explain away what’s going on.
As I said in a previous post, the people will pay whatever to get to work. If one has a job, $4 or $6 they will pay it. At $6 (I’m picking a value) the lower earners will stay home or find more creative ways to get to work (carpooling for example). But of course it won’t get to $6 for now.
I’m guessing we’ll toy with $5 countrywide (some places will see $5 earlier) more as a measure of how much we’re willing to pay. If the administration has any political bone left in them they may “launch an investigation”, have Congressional hearings, and chastise the CEO’s in a wildly publicized move while not addressing the issues of rampant speculation and gamesmanship visible in the market.
See, the smart folk have already gamed it out and found it is better to NOT mess with the price of crude as it affects the world economy. Better to mess with refined gasoline and diesel (what’s diesel Dad?) and thus only hose the US.
I reiterate my prediction. Nothing will happen until those businesses that will get hosed by high oil prices speak out:
- Airlines and the hospitality and travel industry overall
- Auto industry
- Big Box discount retail
- Service jobs depending on reasonably priced energy
- Fast Food industry
- : : : and so on : : :
$3.85 yesterday (rare for spikes on a Friday in Toledo, OH) after the $3.75 spike earlier this week. If there ** IS ** a recovery going on (which I think is bull), this will kill it!
This is why, as I’ve said in another post on The Gas Game, I’m a huge advocate for E85. It may usually be more expensive per mile (because of lower efficiency), but the price is far more stable than that of gasoline. E85 will most likely never reach $4/gallon. There’s no rushing to the pump to get it before it goes up… I just get it when the tank gets low. We have to look for alternatives to gasoline sooner rather than later, and ethanol is something that already exists. The infrastructure exists; we just need to improve upon it (admittedly, a lot). If you were to look up your vehicle’s fuel economy ratings on fueleconomy.gov, the amounts they estimate that you’ll spend on fuel each year is based on the current fuel prices. These estimates DO NOT account for wild fluctuations in fuel price, or difference in fluctuation between prices of different fuels. I’m willing to bet I’ll spend less on E85 this year than I would otherwise have on gas because of the price stability.
A.W, I understand your sentiment on E85, but I believe the price stability is more a reflection on the small volume of E85 that is moved. If E85 were the primary fuel source, I’m sure Marathon, or someone else, would be more than happy to keep raising the price to see what people are willing to pay. As it stands now, there’s just enough profit in playing with the price of E85.
Ethanol is indeed a commodity, so there is a small amount of rockiness with the price. E85 though, is for the most part domestically produced. So to the point that the pricing would become volatile if that was our primary fuel source, we wouldn’t have all these overseas factors that cause such wild spikes and fluctuations in the price of fuel. There are also other ideas, such as biodiesel, or electricity (hey, it could happen).
And so it begins . . . I’ve had enough, absolutely NO MORE unnecessary trips for me. I will cut down my cost of driving and will not make any unnecessary trips. Was getting back to just ‘running out for the heck of it’ and now, I’m pissed, so screw it. I have no problem whatsoever combining trips and cutting back so that’s what I’m going to do. Also, buying more ‘store brand’ items . . . some things you can’t change [there is NOTHING that replaces Hershey syrup no matter what], but cream of mushroom soup or tomato soup?? Yep, store brand it is. I will not sacrifice putting money away for ME just to buy gas. Yes, now it is becoming all about me and my survival in retirement [whenever that day gets here - if it gets here]. I live on a tight budget anyway, but I can and will live tighter!!!! As for eating out – screw that too – I like my own cooking better 99.9% of the time anyway. Eating out is for convenience mostly. I think I’ll change it to pizza only when I HAVE to have it!!
E85 is a joke. Turning food stuffs into fuel is a joke. Without massive Government subsidies it’s not viable. Corn production nationwide is up 40%, where do you think all that fertilizer for corn based ethanol is going? Just look at Grand Lake St. Marys, Lake Erie and various streams and rivers that are experiencing toxic algae blooms. Virtually all increases in water pollution nationwide can be traced back to the increase in corn production to facilitate ethanol production… It’s a bad, bad idea.
E85 most certainly is not a joke. However, I’m glad you brought up that point. Ethanol does not have to be made from corn. It can be made from wood, switchgrass, and other byproducts (even the rest of the corn plant). I agree we should not make ethanol from corn, so we need a huge investment in mainstreaming the process of making it from non-food sources such as switchgrass. That being said, ethanol is not the only alternative. Right now, biodiesel, electricity, and natural gas are among the other viable options. The fueling infrastructure is another story.
A.W. every person you convince to switch to an alternative, makes my gas a little cheaper, so go right ahead. Corn ethanol is definitely not the solution.
My own personal opinion is that natural gas will be the wave of the future at some point in time. Nothing to back it up, just a gut feeling that it would be easier to insert natural gas pumps in addition to existing gas pumps @ stations we currently have versus building new stations. JMHO is all.
That’s not how it is going to work, I’m afraid.
Any technology that has the potential to reduce fuel costs will not produce the expected outcome as long as it is tied to the existing infrastructure.
Let’s say I come up with an engine that burns MILK. We go to our friendly Speedway and have our choice of high octane (full), medium (2%), and low grade (fat free). Do you think for a second that price of milk at the pump will not follow the standard Speedway practices, or that it will priced accordingly to either not make it competitive (a’la diesel) or not worth the effort financially (a’la E85). The same with natural gas. Do you think for a second that if LNG gives you the same mileage (example) and costs half of gasoline (example) that you will be able to buy it at Speedway at that price.
That is where the fallacy of alternative fuels lies. As long as there is a need to move, any form of energy used to move will be priced accordingly. Diesels were the first canary in the mine and have served well, all but making the best technology we have currently useless due to ridiculous pricing.
Fast forward 10 years when I’ll be driving a golf cart in Ft. Myers and say 10-15% of cars will be plug ins. Do you think for a second the EV’s will maintain their considerable financial edge (operating costs, not purchase price) over gasoline and other fuels? not in a million years.
Either the electric companies will require dual meters for 240V and price 240V in par with what will likely be $5-6 gasoline or if we’re really unlucky they’ll price ALL electricity the same. For extreme misfortune, Big Oil would do well to start buying electric utilities and price accordingly.
10 years, people. You have been warned.
the reply I rec’d from Speedway’s Facebook page when I gave vent to the incredulity of 3 spikes in 8 days and their near monopoly in our regional market: “Thank you for reaching out. Our raised gas prices are always based on cost. Retail prices are not always reflected by crude price because the refined cost and distribution prices can vary greatly. In addition Michigan prices are generally higher than its neighbors because it has the 6th highest gas tax in the country. If you wish to speak with a specialist please call our Customer Service group at 1-800-643-1948 Monday – Friday 8:30 AM – 5:30 PM EST and they can get you in touch with someone to speak with you about gas pricing.”
Ocho – a few months ago, I did the same thing, on their website. I called them out for the bull about prices being based on cost. Basically, I shot down any legit reason they could try to give. The response I got was, “well, it’s a trade secret”. Indeed.
ROFL
The industry has hidden behind the “refining and distribution costs vary widely” mantra for a while. A while back I referenced a California State website that had this broken down and indeed these costs varied widely, one could say wildly, from week to week.
With the exception of changing gas formulas, as an engineer, I fail to see why. A gallon of gasoline takes $X to refine, $Y to get to the market, and $Z marketing and profit costs. Other than Z, the other costs are largely fixed week to week.
Not that it matters of course, since Z is where it’s at.
Nice try with Speedway there Ocho. The person who wrote that response was probably laughing and smiling with every keystroke. When you have a monopoly on the market we as consumers are the ones who get shafted. Hopefully Greedway won’t try to absorb any more little guys like they did last year with Gas America, but if they do, other states will be welcomed to the Greedway effect.
Are there any Greedways in southwest Indiana down towards Terre Haute, Princeton and Evansville? They seem to traditionally have the lowest prices in the state. Only in the last 2 days have I been seeing high gas prices geting national attention on the news. A little late don’t ya think!! I’m seeing the first few stations in Muncie slip into the $3.78 range. Sounds like this will be done so the next spike can hit $3.99. Conveniently below the psychological barrier of $4 per gallon.
What you said Turbo about technology reducing future fuel costs is spot on. Milk, water, pepsi…it doesn’t matter what’s used to replace gas. Companies will find a way to manipulate their pricing and put a stranglehold on the end users once again for maximum gain.
In the end, no matter what we end up paying for a gallon of gas, this will always be true.
” The rich get richer, and the poor get poorer. ” They want to be the kings, and we are all the paupers in thier sick little game.