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.

Updated: December 9, 2015 — 1:40 pm

21 Comments

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  1. Since we’re so close to the spike line, I’m sure we’ll get a jump tomorrow. My question is will they spike us again next Thursday or lay low next week and kick in a big 40 cent spike on December 22nd? Does anyone know where my rose colored glasses are lol.

    As for gas at $1 dollar, I’d say we’ll never see that again. Lafayette Indiana did dip to $1.39 several days back which was nice to see. With the margins built in, even if spot dipped to .10 cents, I’m sure gas would still be above a buck. I’d settle for seeing $1.xx all year round!

  2. With labor costs, refining costs, and delivery costs, I don’t see that gasoline could make it much under $1.50 even if crude was $15.

  3. Oil at around $36 a barrel is $6.13 a barrel in 1971 prices.
    Gas in GRR at around 1.73 shows being at .29 in 1971 price.
    I pick 1971 cause thats when I graduated from high school and BEFORE gasoline prices TOOK OFF.
    So when I hear people whimpering about EXPENSIVE gasoline today I laugh and laugh….guess what IT ISN’T EXPENSIVE, it around the same price as 71!
    “Same as it ever was, same as it EVER was.”

  4. Speedway is cycling this morning and resetting to $1.99 across Michigan, Indiana and Ohio. Grab it while you can!

  5. Speedway spike to 1.99 in South Bend, IN & Niles, MI has begun. I filled up for $1.71 already.

  6. Bought gas in the Ann Arbor/Ypsilanti area this morning for $1.69. Gas Buddy says our local prices are “stable” but the usual suspects have already moved up 20 cents. Plenty of options to still buy at the mid to upper $1.60’s as of now.

  7. Spot rose nearly 14&cent MORE today on news of refinery problems in the Chicago area. That was not factored into any hikes that occurred today.

  8. From Yahoo Finance:

    “A reformer malfunction on Thursday had little impact on production at BP Plc’s 413,500-barrel-per-day (bpd) Whiting, Indiana, refinery, sources familiar with plant operations said. Work was underway to fix a malfunctioning valve on the 60,000 bpd Ultraformer, which converts low-octane refining by-products into high-octane gasoline components”

    I wonder what was the cause of the 14 cent spot jump? Another spike to $2.19 on Tuesday in the cards perhaps?

  9. Coincidental of course, but the news has been trumpeting low gas prices all week. Now, with a possible spike Saturday, prices could go up 43 cents within 3 days of their story… Too funny.

  10. yes..we got the reset to 1.99 in NW ohio..although several stations actually went down a few cents hours before raising it- presumambly so they could raise the price more than 20 cents..as prior to that were around 1.83 a gallon

    expecting a 2.19 push saturday too given the sharp rise in spot prices. Mind you with the Jeep in the shop currently after losing an argument with a Deer last week , the rental Huyandi Elantra is purring along the daily commute at 38 miles to the gallon..so it softens the blow

  11. Gasbuddy: “are you sure? That seems high”.

    yeah, no kidding.

  12. “Gas for a Buck More? Possibly.”

    Fixed the title for you.

  13. Darn near every time the news media have some story about gas prices, that very day, Greedway spikes away!

    Coincidence?! I think not!

  14. Oil below $36/barrel, and gas at $2/gallon.

    Just about a year ago, oil was at $45/barrel, and gas was $1.83 per gallon.

    I find that quite amazing.

  15. Unfortunately oil can drop like a rock which it’s currently doing, but one little glitch at BP Whiting and we know what happens after that. In mid-November, crude was about $6.50 higher than todays close and spot was 93 cents. Yesterday’s malfunction at BP Whiting has been fixed so its running full speed as of today (keep your fingers crossed)

    I would expect spot to go below that mid-November low very soon as long as this keeps up.

  16. Going up to $2.19 in Chicagoland this morning. Why they passed on a Friday hike when margins were a penny worse yesterday, I’ll never know,

  17. well got that one wrong..no weekend spike NW ohio

    in fact a very confusing picture right now..1.99 in some places …1.69 30 miles down the road
    lot places that reset to 1.99 thursday are back down 10c today to 1.899

    with spot dropping back again today some places are a few cents below spike some 20 cents above so who knows whats gonna happen next

    if spot continues to fall next few days we could stay below $2.00 for christmans..but who knows. Picture in the RT20 corridor is very confusing

    anywhere else seeing a mixed pattern too???

  18. I’ve found without an accurate picture of what spot is doing since it’s been moving so much lately, I’ve been throwing my hands up. More increases in midwest gasoline stockpiles in inventory report today and haven’t seen it drop all that quickly in the indy market since the increase 6 days ago. Just assuming we’ll cycle… at some point. But not likely above $2 unless refinery issues.

  19. I’d rather miss the bottom price by a couple ¢ than get stuck with a full priced tank.

  20. Our gas in Indiana is only down 6 cents from last week’s spike which is an abnormally slow drop. I noticed crude is now under $35 bucks a barrel, but spot is just trickling down.

    I wonder what Speedway will get us for Christmas next week?

  21. If spot doesn’t go down any more, Ohio will get a gift of $1.999.

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