Month: January 2016

Enjoy Low Prices While We Can

Comment on the January 14 prediction:  Prices have been dropping since the start of the year, so CORRECT.

Saturday, January 23, 2016, 9:00AM:  So much for “gas prices bottom out in December each year”, as things have been crazy this month, including a serious gas price war in Houghton Lake, and the price of oil plunging below $27 a barrel before recovering late in the week.  It is difficult to explain what is going on:  too much supply?  hedge fund blow up?  early signs of an election-year recession?  But we are here to help you navigate retail gas prices, and here is the current outlook:  wholesale prices continue to fall in tandem with the price of oil, and I estimate a price to retailers this week in the neighborhood of $1.50 a gallon.  With a lot of $1.57’s around town this morning, we are getting close to price reset territory.  So, my strategy would be to fill up Monday morning, and maybe again Tuesday morning, expecting a price hike this week.  Of course, if wholesale prices start bouncing around again next week, all bets are off. — EA

Election Year Worries

Comment on the December 30 prediction:  Prices held steady until we saw a reset on January 4.  It wasn’t what I expected (a Fat Fingered Greed Grab?), but it wasn’t too dramatic either.  1/2 CORRECT, 1/2 WRONG.

Thursday, January 14, 2016, 7:00AM:  A belated Happy New Year!  But it has not been happy for investors in stocks … or energy, with oil dropping to $30 a barrel.  The question on more-and-more minds is whether the markets are adjusting to Federal Reserve policy, and this is another one of those scares that builds up a “wall of worry”, or if the markets are predicting, or maybe causing, a new recession.  Looking back over my adult life, years where we changed Presidents have not been too hot, economy-wise (e.g. 2008, 2000, 1992, 1980).

For those playing The Gas Game, though, we should be in really good shape.  Wholesale gas prices have dropped below $1, reflecting the collapse of oil prices, and with taxes and other costs, I estimate a price to retailers this morning of $1.56.  With the cheapest gas in GR at $1.75, we have room to drop, and I predict we’ll see noticeable downside action through the weekend. — Ed A.

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