Month: September 2015

The Shadow of Glencore

Comment on my September 14 prediction:  Seeing how we saw hikes across the board on Wednesday, September 16, the prediction was WRONG.

Tuesday, September 29, 2015, 9:15PM:  I’ve been reading a bit this week about Glencore, a giant commodities trading firm that has been falling apart this summer.  This company is an example of the kind of speculators that play havoc with the oil and other markets, and there is some evidence that the collapse in oil prices (and lately some stock markets) may be connected to some of their failed trades.  That Glencore is starting to percolate in the media (my favorite quip is “You can’t spell Glencore without Enron“), I am starting to wonder if this is the beginning of the end of the bear market in oil.  In fact, oil prices hit their low of the year on August 24 and have been slowly rising since.  Gas prices started turning around on September 16, and now there are hints of another price hike in the works.  Estimating a price-to-retailers of $2.37 a gallon, and with prices as low as $2.31 in the Grand Rapids area, I smell a hike coming on Wednesday or Thursday.  $2.59 a gallon?

Back on alert

Comment on September 14 prediction: Correct. Indiana and Michigan spiked on September 16 with Ohio following on September 17.

Monday, September 21, 2015, 11:10 PM: Decent sized jump in wholesale today puts us back in the danger zone. Ohio is still slightly above the Spike Line, but Indiana and Michigan have headed below it with today’s increase. I’m looking for a Spike as soon as tomorrow to the $2.39 – $2.49 range for the Great Lakes region. Ohio may go a day later than Indiana and Michigan, but I wouldn’t chance it if I were you.

Still no rush to fill up — maybe later this week?

Monday, September 14, 2015, 2:30PM:  I know, it has been too long since my last post, but what I am supposed to post everyday — “Expect prices to fall?”  What a crazy time it has been, as prices soared on August 12 and have been in free-fall for a month.  Here’s the current setup:  based on a midday quote of Chicago CBOB to $1.38 a gallon, I estimate the price-to-retailers to be about $2 a gallon here in Michigan.  We are down to $2.07 in Sparta today, and $2.29 in a lot of places, so we *still have room to fall*.  I know there are $1.99s and lower elsewhere in the Big Ten region — let’s see it here in the Grand Rapids area!  Looking ahead, we could see some volatility later this week, due to the Federal Reserve meeting, and that could lead to a price reset at the end of the week.  But it is too early to say, and we should be safe through at least Wednesday. — Ed A. (c) 2017 Frontier Theme