Month: December 2015

Time to wrap up 2015

Comment on my December 9 prediction:  A perfect CORRECT, as prices rose the next day to $1.99.  We saw another reset (sort of) to $1.99 at the beginning of this week.

Wednesday, December 30, 2015, 3:30PM:  Time to wrap up 2015.  My “home station” to track prices in the Speedway on Lake Michigan Drive & Collindale Avenue, and in the first half of 2015, prices crept up until we got to $2.99 on June 11 and again on July 1 and on August 12.  Then the bear market in energy really started to snarl, and we enjoyed falling prices the second half of the year.  Sample prices:  $2.24 on September 15, $2.17 on October 30, $1.99 on November 20, and our low of the year:  $1.78 on December 1.  Hard to complain about a 40% drop in retail prices in six months.

So, what to expect for 2016?  This article is helpful, particularly the “Cumulative Average YTD Change” chart.  It gives you a sense of what we’ve seen for years:  prices tend to rise until about Memorial Day, get more volatile through Labor Day, and then decline into some point in December.  Despite oil prices appearing to head to new lows this week, I suspect we’ll see the same trajectory in 2016, leading to prices typically over $2 come March or April.  Short term, though, there is no sign of a hike in the air.

Thank you to all our readers for checking in regularly.  We’ll keep playing The Gas Game in 2016, and you can find us on Facebook, Twitter, and on our web site.

An Early Christmas Present?

Looking over the numbers for today and margins are starting to get pretty skinny in Ohio. Retail averages have dropped all week as had Chicago CBOB prices… until today. We’re currently sitting right down on the Spike Line in Ohio. I’m looking for a price reset as soon as Friday morning to about $2.099. Hedge your bets and top off before that. I haven’t calculated the Spike Lines exactly for Indiana or Michigan, but just a quick survey indicates that they are in about the same position.

Gas For a Buck? Doubt it.

Comment on the November 24 prediction:  Michigan seemed to escape the Midwest Thanksgiving price hike, so I was WRONG.

Wednesday, December 9, 2015, 1:30PM:  Saw something in the media this week speculating on 99-cent gasoline in 2016, as oil prices dropped to a new low for the year.  I’m skeptical, but what has been causing these low prices in oil and gas?  Some ideas that I’ve heard about:  (1) This is an early-warning sign of a recession next year.  (2) Efforts underway worldwide to reduce demand for petroleum (e.g. solar and wind energy, cash-for-clunkers) and increase supply (e.g. fracking) have finally made a difference with prices.  (3) We were paying a “risk premium” in the last decade due to the Iraq war and other instability in the Middle East.  (4) This is a temporary respite caused by the collapse of energy speculators such as Glencore.

We won’t know the answer for sure for a long time, but very short-term, December is usually the month of cheapest gas prices, and that is true in 2015.  With retail prices dipping to $1.70 and wholesale prices perking up a little this week, I predict we’ll see a price reset before week’s end, back to $1.99. — Ed A.

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