Flying Blind

Comment on the April 3 prediction:  Prices have continued to drop, as predicted.  CORRECT!

Sunday, April 14, 2013, 10:45AM:  For those who follow the comments on the blog, you know that this past week, Bloomberg stopped providing free quotes for the “Chicago CBOB” prices, and these prices have been very useful to estimate the price to retailers and win the Gas Game.  So, what can we use instead?  Bill and I have been trading e-mails on this problem, and here are the options as I see it:

1.  Go back to using NYMEX (New York) prices with some sort of Chicago fudge factor, like I used to do.

2.  Tease out from AXXIS-Wisconsin the wholesale price.

3.  Tediously go through news reports at Murphy Oil in order to find the daily report on Chicago prices.

4.  Come up with a new, free source of Chicago CBOB quotes.

I am going to exploring all four options going forward in order to continue to play and win the Gas Game.

As for current gas price conditions in Grand Rapids and elsewhere, oil has been in a downtrend since the beginning of the month, despite new highs for the stock market.  This Murphy Oil report suggests a CBOB price of $2.64, which translates into a price to retailers of $3.32.  That suggests $3.40 in Grand Rapids is our trigger price for a hike.  With gas selling for $3.34 in Sparta this morning, let’s go on alert for a price reset on Monday or Tuesday, to $3.59 or so.  — Ed Aboufadel

Posted in Commentary, Predictions
36 comments on “Flying Blind
  1. Turbo46032 says:

    Any conspiracy theories as to why RBOB is MIA?

    Methinks offing RBOB would make it quite a bit harder to predict spikes – combine that with a few changes in strategy (i.e. spike earlier or later than usual) and one could have a whole new ballgame in our hands…

  2. Sam says:

    Stopping @ Cedar Springs Meijer today while out – – $3.29 with the Meijer credit card – – YIPPIE!!!!

  3. Ocho says:

    Despite the usual assumption of “we’re raising prices because we’re greeedy/we can” what is the anticipated rationale for the impending spike tomorrow afternoon/tues? Especially if the price of crude keeps dipping, and the winter blend switch has happened weeks ago? Weather/refineries arent an issue either, so what creative excuse is expected?

  4. Turbo46032 says:

    There have been some very well timed spikes on the way down (crude) that appear to have no good reason other than to keep the price of gasoline higher while crude is going lower, with the hope that crude can ‘recover’ and justify another hike a couple weeks later.

    I don’t think the one next week fits this pattern tho. Prices have dropped by quite a bit, I don’t think the peasants deserve 3.27…

    Another cudos for the defense-playing Marathon station next to Costco in NW Indy. Everyone on Michigan road are 3.29 or so, and this Marathon at 3.39. Costco at 3.27. Way to go…

  5. skyler says:

    so the Chicago CBOB prices are only available through the “professional services” from bloomberg! Seems that they saw a significant business losses due to early predictions of ‘the gas game!’ any opinions???

  6. TimmP says:

    Bloomberg’s income is independent of how much any type of gasoline is purchased at any time. Rather, I would expect that as many times as that page got “hits” they figured they had found something that is popular enough that they can now make $$ from it rather than give the information away for free.

  7. DanielG says:

    Gas at 3.21 in Belding as I write. Oil both Brent and WTI is down down down today as is gasoline, copper, gold and silver. Gold dropping like a rock so I will assume people are going to cash or stocks?

  8. TimmP says:

    For Gold, it is down because a small country has threatened to sell off it’s gold reserves. This has those that bought gold on margin all jittery. This is not a permanent thing. Good time to buy. As for oil, and the rest, I don’t know. But I’ll take it. We may, just maybe, see gas below the $3.00 mark for a few days. Maybe!

  9. Sam says:

    Going to $3.65 as we speak in Grand Rapids.

  10. The Real Truth says:

    Just went to $3.49 in west central ohio… You called this one..

  11. Mike - Kalamazoo says:

    3.65 in Kalamazoo.

  12. ChrisDG74 says:

    Greedway $3.499 in sw Ohio as well.

  13. TimmP says:

    $3.26 at Kroger on West State in Fort Wayne, and $3.21 at Ricker’s stations if you have their gas debit card.

  14. TimmP says:

    A Shell station in town, Fort Wayne, has just jumped to $3.55. I am sure that others will follow very soon. Indiana as a state has started it’s swing UP in prices on GasBuddy. So has Ohio.

  15. Chris says:

    GREEDWAY must not be pulling in enough money? Perhaps their CEO is going on vacation soon and decided to spike things to help pay for it???

  16. Turbo46032 says:

    Once again, awesome spike timing. It won’t last long, but it really made me smile for the long term career prospect of the low level Speedway functionary whose job is to time the spikes. I mean, crude back in the $87 range and falling, and a spike?

    We usually see a few of those every year. Good job (NOT :-))

  17. Ocho says:

    3pm Spike here in mid Michigan. gas stations that were 3.22 at 8am ( speedway, natch) were 3.65 at 4.30 3.59 average in town, staying lower price the further east in you drive into Flint MI with a few die hard stations holding at 3.21 as late as 9pm. Mostly Admiral, a few marathon, and inexplicably, at least one speedway. The worst spikes are are within 1-2 miles of expressway ramps. a few exceptions being BP & Sunoco in the 3.40-60 range. Its going to be interesting to see what the situation is at this time tomorrow. Maybe a lackluster spike to the 3.40s?

  18. skyler says:

    $3.85 for shell and bp by the 28th street and wilson ave. in grand rapids/kent! $3.65 for most of the greedways in town. $3.48 for the rest stations, $3.42 costco, $3.39 sam’s club. Why are the prices are everywhere?

  19. independent retailer says:

    As of the time of your post. The cost to this retailer was 3.47. Just an fyi

  20. Turbo46032 says:

    Perhaps if independent retailers (a) refused to play the merry go round and (b) actively took a stand, including a legal one, against such price manipulations maybe we the consumers and them the independent retailers might just be able to rid ourselves of the curse.

    Ask yourself if you would put up with such pricing for anything else you buy. 5-6 states are cursed by this but 45 others are not.

  21. Ocho says:

    3.65 has become the majority price in Flint MI, with a few hold outs in the anticipated best case scenario 3.40-3.50 range. Interesting that a new trend seems to be speedway abandoning usual 35 cent spike in favor of 40+ cent ones if there is a lowering trend of more than 7 days.

  22. Ocho says:

    Posted on speedways FB page :
    “Crude continues to trade lower. Yesterday you gave us a 40 cent price hike in Mid Michigan. On tax day no less, when everyone has just sent money away to the IRS…. Winter blend switch has already happened and according to research, there are 0 regional refinery / weather issues. Whats the excuse this time? DO NOT pull that “Well Michigan has higher gas taxes than normal” line again. The gas ta…x has not been increased, despite what Snyder wants to do. Why do you keep manipulating the market here in an economically depressed region? You’re damaging peoples lives and livelihoods. We cant buy your coffee or pizza if it all has to go into the tank. No other region of the US has the radical swings suffered by those of us in speedway dominated outlets. Do the right thing, be a good neighbor and eliminate these excessive spike tactics. ”

    Yeah, I know its futile, but its got to be said, in public.

  23. Chris says:

    That’s hilarious Ocho, but oh so true. Turbo mentioned it too with the 5-6 states being cursed. Sure sucks to live in one them!!

  24. Rudy says:

    Our local Speedway (11/Little Mack in St. Clair Shores, MI) on the corner was $3.41 on Sunday, but jumped to $3.65 Monday morning. I’m with everyone else here–I see NO rhyme or reason to these price spikes! I have gotten into the habit of topping off my tank every Sunday afternoon, as it seems lately that prices reset often on Mondays.

  25. Derek says:

    Go figure. Some local stations, independent stations have already dropped 10-15 cents since Monday. SMH.

    I should be happy they are dropping again but instead it infuriates me even more considering the empty reasoning behind the spike anyways.

  26. skyler says:

    I think the end-link gas station may not have much choice with respect to prices but certainly they can stand-up against unjustified price hike. the cost of refining oil is constant, the cost of transporting is constant (by constant I mean, they don’t increase on daily/weekly/monthly basis, generally adjusting once in a while, like our paycheck! correct me if I am wrong). the chemistry of crude oil doesn’t change within the expected margin. the tax structure on gas is fixed and must be debated before any change! the only thing that changes is the crude oil price at the commodities market (I guess that too reflect the futures!). Thus, with this overtly comprehensive understanding it simply appears that we pay almost $1.50 over all the prices included on every gallon we buy! this margin-over-margin! can anyone justify this? recently I wrote to rick snyder (corrupt governor of our state, no apologies to anyone here who favors him). I wrote to him regarding his proposed gas tax hike to pay for the michigan roads, I asked him to explain to me (a) where is money from the gas tax collected in the past decade went that we all of a sudden end up having worst roads in the entire state? (b)he mentioned that due hybrid vehicles less fuel is used, I asked him to show the data of past decade to give a comparative on how the gas consumption behaved due to hybrid vehicles, (c) I asked him to show me how well are the DOT personnel are paid by gas taxes instead of using money to fix roads for which the money is intended. You know fellows, this letter was sent in February 2013 and haven’t heard anything from this corrupt governor of our state. Today, just before writing here, I heard on the NPR that he is going take away almost $1billion from Michigan’s public schools to divert towards fixing roads. He will never respond to genuine queries such as above to the common man, he will reap our so strong education culture by draining the public school’s money and he will just favor the corporations. I understand that we will just sit and do nothing! I tried approaching other offices in this regard, the attorney general’s office reponded that they cant take action unless a criminal charges are filed, I dont have the means to gather evidences to prove that snyder is doing corruption under the sun and god so I will have to leave it here. nor the other authorities will jump in without a complaint based on evidence! It would be of help if we could file individual ‘freedom of information’ in this regard as more the askers the more responses they have to give the more aware they become that we the people are observing and are concerned!

  27. Turbo46032 says:

    “the cost of refining oil is constant, the cost of transporting is constant”

    Big Oil will have you think otherwise.

    The State of California maintains a very entertaining web site where the break down the cost of gasoline into its ‘components’. The variations in refining and distribution costs week to week are beyond funny.

    http://energyalmanac.ca.gov/gasoline/margins/

    Take some time and look at the prices when oil hit $147. Very funny.

  28. skyler says:

    well said Turbo46032 and thanks for sharing the link. If you see the various columns, there are profits added multiple times. Isn’t that nice that they show all the cost and avenues for the profit(s)? In a way, corruption made legal so that no one can raise voice! How many times do we get paycheck or interest on our savings in bank? I guess once per month, though, this chart shows that they can add profit as many times as they want. Also, they are associating cost to marketing, I think that even a little kid knows that gas is a necessity and charging for marketing when there already exists a huge need is like reinventing the wheel! Yes when the gas hits $147 then we will all walk to work or decide between the grocery or gas!

  29. Turbo46032 says:

    Interesting, tho, that when crude hit $147 all of a sudden refining and distribution started costing negative dollars, in an effort to keep prices LOW at the pump… Kind of shows that the $147 was not Big Oil’s doing.

    The current situation, tho, with high gasoline prices but relatively moderate (LOL) crude prices is all Big Oil all the time.

    As long as independent retailers play along with their puppet master, the status quo will remain. At the end, I can’t help but wonder if independent retailers lose out in all this way more than consumers are (which may well be the purpose of the spikes to begin with, except that the independents are too busy changing prices to notice)

    Say, independent retailers, what will the retail gasoline market look like if the end strategy of the speedway pricing runs you out of business or forces you to merge / close?

  30. ChrisDG74 says:

    A lot of stations around me either never jumped, or have dropped back to their pre-spike price(or lower).
    Gotta love a failed Greedway spike.

  31. Ryan says:

    I’m seeing the same thing in the Dayton, OH area. Two stations that I drive by regularly went from $3.299 to $3.499 and now are all the way down to $3.259. The Speedway station down the street has come down to $3.439 and the sad part is, there are more vehicles filling up at Speedway than the stations that are 18 cents lower.
    And people wonder where their money goes! They could easily save $100+ every year by going to the least expensive station along their commute. I drive 30,000 miles a year, so timing up the SPIKEs and filling up my extra gas cans not only saves me money at the pump when I fill up, but also lengthens the amount of time between fill ups to give the SPIKEd stations time to come back down to a realistic price.

  32. Jack says:

    As I stopped for a light in New Lenox IL this morning I commented to my friend that the price at the Speedway was relatively low (for Illinois) at $3.47. By the time he looked up, the price changed on the electronic sign to $3.89! Unbelievable jump for no apparent reason with crude prices falling. On the way back, it had dropped to $3.85 but other stations in the area are $3.99. What happened today?

  33. Ed Aboufadel says:

    Jack — here comes the hike. Just found the article about Chicago prices soaring:

    http://customercenter.murphyoilcorp.com/index.cfm?show=803&product=DTNMKTWRHEADLINENEWS&id=07020A5E

  34. Tuebor says:

    Was there ever a source of Chicago RBOB spot price? I live in an RFG area and would expect the RBOB price to be more relevant.

  35. Tuebor says:

    That looks like a futures price and not a spot price.

    Or are you asking me if I’m in Chicago? No, I’m in the Detroit area, but we have a more stringent summer RVP requirement (7.0) than the rest of the state (9.0). Somewhere I read that RFG can be used to meet the RVP requirement. I wonder if the local Marathon refinery makes a summer 7.0 RVP blend for this area, but the other local terminals supplied by pipeline from Chicago area refineries might ship RFG here to meet the RVP requirement.

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