No Hike Thursday

Wednesday, March 19, 2014, 6:15PM:  Nice drop today in wholesale prices, so we should see some relief at the pumps through the weekend (unless wholesale prices jump back up on Thursday).  I’ll predict lower prices at least until Monday.  –Ed A.

Posted in Predictions
41 comments on “No Hike Thursday
  1. Becky_Gelke says:

    Chicago Spot down over 20¢ in three days. At the moment the Cincinnati average gas price is at $3.60. about 10¢ over the national avg. We should see a drop toward the national avg soon.

  2. Ren says:

    Over a week of declines here in Indy, with our average price down about 20 cents from its high.

    Less than five cents separate us from the US average. We’re 30 cents cheaper than the same time last year.

    It’s been a rough couple months, but at least there’s a temporary respite, and it looks like there’s a little more room to drop — for now.

  3. Turbo46032 says:

    I’m curious as to how different are the self reported prices on various sites vs the weighted prices of how much per gallon times how many people paid that kind of price.

    If you have two zones, one lower than the other by 20 cents, the average is halfway. But if only 10% or 20% of consumers are able to buy at the low zones due to location, then the average price is not representative.

    Anyone knows how those averages are calculated?

  4. TimmP says:

    Turbo: I can only tell you this much. I work with statistics a lot, I do massive analysis of numbers in all sorts of situations for a large mobile telephone company. What I know for sure, is that on Gas Buddy, the type of info required by users for reporting pricing….Gas Buddy has no way of reporting a “weighted” price figure…..unless they get back chanel information from either the dealers or the distributors….Very Unlikely. So the numbers we see is simply a “MEAN” calculated by combining all the reported prices and dividing it by the number of reports. Simply an average of reported prices.

  5. Ren says:

    And I think that is quite sufficient for the service provided. There are enough stations spread throughout a typical market to make the posted average useful.

  6. Turbo46032 says:

    I’m impressed Ren. Another response in under an hour :)

    I have a solid understanding of statistics myself – my first paychecs came from statistics – and I’ve picked more from my wife, a statistician. The way prices are reported we have no idea about the impact of prices to people.

    Think of it this way. Take Illinois vs Delaware. Illinois has ten times the people but if you average 3.95 for them vs. 3.55 for Delaware (just an example) the average comes out to 3.75 which is incorrect in terms of impact to people because ten times as many people pay 3.95 vs 3.55.

    I feel as a minimum prices for a state should be weighted by its population. Some services report average transaction price from credit card receipts at the pump.

    We can only hope…

  7. renbutler says:

    Okay. But that doesn’t change what I said: GasBuddy provides exactly the useful service to the consumer and the casual industry observer that it intends to.

    I have no problem with your curiosity about more complex data. But if one (anyone) were to suggest that GasBuddy’s average price reports are misleading, I would strongly disagree with that. They are exactly what they advertise: the average of all reported gas stations in a given market. The website user can then use it as he sees fit.

  8. renbutler says:

    Are we having a Saturday spike? It looks like many stations are up to $3.759 in Indy that weren’t that high yesterday.

  9. Justin says:

    Ren – Yeah, it looks like prices are spiking to that price both in Indy and in South Bend. I’m going to fill up for $3.33 just in case.

  10. Phil says:

    Spike confirmed in Indy. There are still some stations at the lower prices. Fill up while you can.

  11. ArrowFlinger says:

    Just got the Meijer text that prices are jumping. Gas Buddy is reporting the local Speedway at 3.17, which I think someone fat finger a 3.71. Everyone else is in the 3.50+ before spike. That speedway was just rebuilt and has been having price war with the new Kroger for the past 2-3 months. They have been consistently $.30 cheaper than the Mobil across the street.

  12. Chris says:

    Surprise, surprise another one of them Saturday spikes. Again, in Delaware County Indiana Speedway loses two in a row. They shot up to $3.75 while the others only went up 9 cents to $3.55.

  13. Jim says:

    Although the spot price for gasoline blendstock dropped 16 cents this week, ethanol spot prices in Chicago rose 72&cent to an all tine record price of $3.30 a gallon, due to a railcar shortage. That’s 7 cents a gallon up side for E-10 based on just the ethanol.

  14. Ed Aboufadel says:

    Guess I was WRONG. Based on the quotes I gather, I can’t figure out a justification for this spike. Hearing rumors of gas shortages in Tennessee; did something happen last night?

  15. Eric Larson says:

    @Chris Sorry I never got back to you on the previous thread but I shall here. You had asked about if I knew the former Gas America before it became Speedway etc. Yes I do, I have lived in Daleville for 15 years now and use to fill up at Gas America all the time. Needless to say I haven’t been there since Speedway bought them out. I boycott Speedway and proudly so. We never had in this area massive spikes until Speedway came along. We always seemed throughout the years to always be 10 cents cheaper than either Muncie or Anderson. That all changed when Speedway took over. We then joined everyone’s prices and spiked right in line with them. Now over the last month something changed…Pilot won’t spike! Speedway still does and then realizes that Pilot never moved, within an hour they go back down to join Pilot. It’s awesome, and proves to me these spikes are for pure profit, I don’t see how Speedway can jerk up prices by 30 cents a gallon and then lower them by the same amount and not lose money…wait they aren’t that’s why, they just won’t enjoy the extra 30 cents a gallon they would have got had Pilot spiked with them. BTW do you know McClure’s uses binoculars to see the competition. Manager told me they have to check every hour.

  16. Turbo46032 says:

    Ethanol rail cars… Haven’t heard that one. So what happened to the rail cars, did they all mysteriously call in sick? squirrels left nuts on the rails?

    Of course, E-85 should now spike to, ummm, $4 + 75 cents taxes etc. to 4.75/gallon. A little less of course because of the 15% dino-juice.

    Anyone holding their breath?

  17. Lou says:

    Many up to $3.75 in South Bend, $3.79 in Niles MI.
    I thought it might go a bit lower but topped off for $3.59 on Friday while it was 50° instead of next week in the 30°s. Good thing I did. West side Walmart still hanging on to $3.55.

  18. Victoria says:

    I’m of the opinion that since taking office; Obama’s entire energy agenda has made a gallon of gas more expensive! His administration has done nothing that would help bring prices down, quite the opposite actually.

    The Troy, MI Kroger just jumped from 3.59 Friday to 3.79 today.

  19. renbutler says:

    Not that I’m a fan of Obama by any means, but I don’t think we should rely on government to “help bring prices down” at all. The more government interferes in free markets, the worse off we are, almost every time.

    The government has its role, but it shouldn’t be manipulation and interference. It should be protection — not against high prices — and law enforcement.

  20. TimmP says:

    Victoria is not wrong. Not only the horrible suffocating onslaught of regulations, but the lac of permitting of new wells, not permitting the Keystone pipeline and more. I clearly remember Obama saying, back in the first running days, that he was not happy with the rate of how fast gas prices rose, not that the prices were high. He also suggested everyone get and use a tire pressure gauge. Never has he looked into getting out of the way of increased production.
    But also, his Federal reserve policy has been to print money. Billions per month. More $$ chasing the same raw materials only pushes up the cost of raw materials, oil included. It is arguable, but it is generally thought that with no QE1, or QE2, or QE3, oil might be at $72, not $102(ish). There is no way to back out of the new raw oil pricing, not without a reset through the entire economy, or a complete market flooding with crude oil. Welcome to the new normal price of $3.50(ish)
    A few threads back, I warned about Fort Wayne getting below the Indian average. I have witnessed it a lot as a per-cursor to a hike. Not always, but often. I also mentioned that I thought the retailers just might like Saturday hikes and to watch out for them as most customers are involved in other things and not watching so closely. Saturdays are EXCELLENT times for a price hike for that reason. You will have to watch wholesale prices Thursday AND Friday, on Friday evening now. Not doing so may leave you holding a half tank or less on a spike day.

  21. Ren says:

    To answer the sarcastic questions from earlier, here’s an article about the rail slowdowns:

    http://www.startribune.com/business/251623281.html

    Not only did the winter weather slow down the shipment of some crude oil, but the increased shipping demands by other industries have made rail transportation more difficult to secure.

  22. TimmP says:

    Pipelines (for example Keystone) do away with the need for rail transportation for Crude Oil, or at the very least greatly reduce it. And they are incredibly more kind to the environment than loading and unloading and possibly derailing train cars.

  23. Turbo46032 says:

    The weather issues were a month or two ago…

    But, from the article it seems other stuff are impacted, i.e. coal. You don’t see prices of things made using coal energy (i.e. electricity) spike like crazy overnight, do you. Also, the problem itself did not manifest itself overnight, did it?

    Don’t confuse sarcasm with cynicism. Big difference. As I’ve said many times, if the oil industry had any credibility left with most consumers we’d take their word for it.

    Of course, the super cynic in me could also see this as a plot to push for pipelines – as the article says, shale oil is being railed out currently. So, let’s all call our congresscritter and ask for a pipeline (which would make it easier to move shale oil to places where it would be refined just enough to not be crude and be exported).

    If US consumers would benefit from a pipeline I’d offer them space in my backyard. But I don’t believe that is in the plans. Again, I’m sorry for being cynical, but that’s how I see it. Why should I accept a risk of a pipeline if I’m not going to see a dime’s drop in price from it?

    At best the oil will make it to the South and be exported after minimal processing. Or, maybe refined and sold overseas. Or, refined and sold to the South where they already have cheaper gasoline prices (fewer squirrels). If they want to see agreement, let’s build a couple of refineries in the middle of nowhere and ship refined product to areas perennially hosed by high gas prices, i.e. the West Coast and the Midwest.

    Of course, I’ll have a better chance of seeing my backyard squirrels learn calculus before I see that happening so…

  24. Ren says:

    First, weather is still an issue. For one thing, the Great Lakes shipping lanes are only now becoming passable.

    Second, electricity is normally subject to regulation as a utility. Power providers can’t just raise and lower prices at will — they must seek approval because of the lack of competition on the regional and local level.

    Third, don’t we all WISH it were as easy to build refineries as you suggest?

    There’s nothing wrong with healthy cynicism, but it makes a lot more sense to know something and then react than to assume things based on emotion. There is a shipping bottleneck in the Midwest, and unless you have proof that it’s a lie, that’s the information we have to go with. But it seems like an awful big lie for literally tens of thousands of people to have to cover up.

  25. Ren says:

    Apparently, part of the enormous shipping demand in the region is due to record grain crops in parts of Canada. With the Great Lakes still closed off because of the extreme cold and ice, grain producers have also shifted to rail — and are experiencing the same challenges as oil producers and refiners.

    More: http://www.stockwatch.com/News/Item.aspx?bid=Z-C:CNR-2157976&symbol=CNR&region=C

  26. Tuebor says:

    It’s amazing Ren, isn’t it, that those with anti-government leanings are the first to want government to “do something” like control gas prices or force an oil producer to build a pipeline.

    Regarding the statistics conversation, here’s my twist: I live very close to inner city Detroit and I see stations on Gas Buddy go for weeks without their price being updated – lots of stations, most of which have lower prices than the suburbs. Whenever I see the Detroit “average” I know it’s artificially high and really represents the average of the suburban donut.

  27. Ren says:

    Actually, I’m very much in favor of a lean government, and I know many who share the same philosophy. However, I doubt many (any?) of us want government to interfere in the economic side of the free market. (It’s reasonable to want government oversight of, say, the safe transportation of dangerous substances, but that’s not the same as direct economic meddling.)

  28. ChrisDG74 says:

    Hmmm. Spot at 2.74, retail at 3.69. Yep, sounds right (not). Filled up in VA for 3.24 today.

  29. ArrowFlinger says:

    Local price war at it again. Son left my car on E this morning, so bought enough to get to work and back @$3.79. On the way home the Kroger dropped to $3.19, so I was able to top off. Not sure if the speedway followed suit. Can’t see the sign from where I was, but the Mobil across the street from the speedway was still at $3.79.

  30. Turbo46032 says:

    Thank you for the very prompt response Ren. I would think that many other things are made with coal that are not subject to price regulations, and also that there are many other things transported by rail that also do not spike because of rail transportation issues.

    I spent some time on Google and conveniently enough, the only two commodities that spiked immediately were ethanol and propane. Coal, wheat, corn, and what-have-you are all immune apparently, just propane and ethanol.

    So, you never told us, how’s E85 doing today?

  31. Pat says:

    ArrowFlinger lives by me, but yes, Kroger and Speedway jumped over the weekend, and dropped back down to 3.19 today, before the 3 cents a gallon reward card discount. I was talking to the manager, who said her cost is 3.70 right now, so we appear to be benefiting quite a bit.

  32. Victoria says:

    Ren, I hate to be the bearer of bad news, but the government has already completely interfered in the economic side of the free market; as well as just about every other aspect of your life. Now any time the government gets involved in anything it costs me more money and more freedom. I believe the government now sees its role is manipulation and interference in our daily lives.

  33. Victoria says:

    Timm P, I think your comments are spot on! Thank you for your insight.

  34. Ren says:

    I generally agree, Victoria.

    However, in an effort not to turn this into a political shouting match (par for the course on the Internet), I was trying to speak philosophically instead of bringing up those kinds of wounds. I’m trying to look forward instead of complaining about the past and present.

  35. TimmP says:

    Victoria: Your and my comments are both meant to lament the past and keep it in memory so as we go forward, we can undo as much of it as possible. ANY and ALL involvement of a government entity adds to the cost. And like I said; Welcome to the new normal price of $3.50+ (ish) a gallon. Until either an economic reset happens (we all hope not) OR the market gets flooded with crude. Then prices can tumble significantly and stay lower. This takes waaaaay to much of my disposable income anymore, and I have cut my annual driving by almost half. Another thing that would help, would be increased storage of refined product. Back in the 60′s there was over 5x as much refined product stored. It could get us through the re-toolings, and the squirrel invasions. Not any more. Environmental regulation made it all to expensive. So now we deal with Just In Time processing and delivery. Something the British call “Almost Too Late”

  36. Victoria says:

    TimmP, I concur with your post. You summed it up nicely. Thank you!

    Ren, as long as no one is being disrespectful or posting personal attacks against anyone they don’t agree with I find open discourse very beneficial.

    I’d hardly call stating the truth as complaining. I’m all for moving forward, but unless one acknowledges the current problems and works towards bring about change, how can change happen? It would be wonderful if we lived in a world without problems that wound us, but we don’t. Perhaps you should just skip over my comments because they seem to cause you distress and that is not my intent.

  37. Victoria says:

    The price for gasoline at the Kroger station in Troy, MI has dropped from $3.75 to $3.62.

  38. Victoria says:

    Buying groceries at Kroger generally gives me between .50 and .60 cents off per gallon so even though it’s higher priced than other gas stations around me, I pay the least there.

  39. Turbo46032 says:

    “Back in the 60?s there was over 5x as much refined product stored. It could get us through the re-toolings, and the squirrel invasions. Not any more. Environmental regulation made it all too expensive.”

    Environmental regulations or profiteering? why bother storing gasoline to keep prices ‘low’ when you can charge whatever you wish and attribute the ‘fluctuations’ to regulations.

    Now, one could ask the EIA and see that the gasoline inventories seem to have been stuck on a VERY narrow range for decades… So I’m not sure less gasoline is stockpiled now than 20 years ago:

    http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WGTSTUS1&f=W

    If one has time to spend the next site has even more entertaining information:

    http://www.eia.gov/oog/info/twip/twip_gasoline.html

    We’re in week 6 of weekly price spikes now. Does it take more than 6 weeks to switch to “summer gas” ?

    Are you familiar with Senator Wyden’s report on refinery shutdowns?

  40. renbutler says:

    Wow, sorry, I guess I wasn’t very clear. I did not mean to say YOU were complaining, and what you said caused me no distress at all.

    I was just explaining why I worded the government intervention post the way I did. Apparently I gave the impression that I didn’t think the intervention was already happening, but I am very well aware of it.

    I was just being careful not to make it an Obama thing or Bush thing or Democrat thing or Republican thing. I moderate nobody but myself, so you are free to talk about whatever you want (subject to the site’s moderator).

    I hope that clears things up.

  41. Victoria says:

    Yes, thank you Ren.

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