Category: Commentary

It has been a peculiar summer so far, so let’s fill up on Wednesday

Comment on the June 11 prediction:  CORRECT as prices slipped lower for the next 11 days, but WRONG on missing the hike last Thursday.

Tuesday, June 27, 2017, 3:00PM:  But it wasn’t much of a hike, and in some places, they’ve given it all back since Friday.  You can buy gas for $2.17 in Wyoming right now, but still at $2.39 in many other places, such as Dorr.  You know, we’ve had some odd behavior for two months now with odd hikes and a 20% drop in oil prices not corresponding to a 20% drop in wholesale or retail gas prices, even with a time lag.  So, let’s predict some more odd behavior.  In Wyoming, we are in price-hike territory already, but not in Dorr.  And with a long holiday weekend coming up, I can envision Big Red getting all the prices back in line in the next two days.  Back to $2.39, or will they go a little higher? -EA

Cheap Gas in Belding

June 11, 2017, 7:00PM:  This spring, we’ve been commenting on what appears to be more aggressive retail pricing of gasoline, with more frequent price resets and higher margins.  That 0-cent margin price still exists, though, and when Big Red takes its foot off the accelerator, you start to see wide variation of prices in the region, like we are seeing this weekend.  As I write this, you can get gas for $2.10 in Belding (northeast of Grand Rapids), but a few miles away, prices are in the $2.40’s and even $2.50’s in some places in GR.  That’s because of the fat margins of those in the 2.40’s right now, and the slim-to-none margins in Belding.  With competition, margins shrink.

Going forward, I see no reason for a price reset any time soon, except maybe in Belding.  And, although we don’t tend to engage in long term predictions here on The Gas Game, this tweet from an economic professor suggests significantly higher oil prices are on their way, and gas prices will follow.  Right now, I don’t believe it, but take a look! –Ed A.

Missed Hikes in May Suggest A Grab For Higher Profits

Comment the April 30 prediction and May action:  Although the original prediction was CORRECT, we have had two price resets on the 10th and the 18th that I have completely missed, hence WRONG.

May 20, 2017, 5:00PM:  Suddenly, our game strategy isn’t working.  The price hikes in May have both come with retail prices at least 15 cents away from where I would predict a hike was coming.  The first hike was rather mild — 9 cents in Michigan on the 10th.  The second one this week was a more intense — 17 cents.  Based on the new prices, it looks like Big Red and his friends are trying to move the window to better margins.  Maybe this will work this time, but in past years, ye old Gas Game kicks back in after a while.  Nevertheless, we’ll have to be more alert this summer and a bit quicker to fill up.  Of course, that’s just what they want. — Ed A.

Game Plan For Cinco De Mayo

Comment on March 27 and April:  The March 27 prediction was CORRECT, as we got a price hike.  I’ve been quiet during April, missing two price hikes.  For the second one on April 19, margins seemed high enough that we would avoid a hike.  But score me WRONG.

April 30, 2017, 12 Noon:  I’m not sure what that hike was about on April 19, but since then, wholesale prices have slipped by a dime.  As of today, we aren’t even close to price hike territory, with Michigan prices in the $2.40’s.  So, don’t be in a rush to fill up this week, unless you need to. -EA

March to leave like a lion?

Comment on the March 21 prediction:  No hike in a week, so CORRECT.

Monday, March 27, 2017, 7:30PM:  I’ll keep this short: uh, oh.  A bad report from Chicago tonight on CBOB prices, so we are set for a price hike on Tuesday.  $2.49 in Michigan?  -EA

You Know You Want To Go Lower, Mr. Gas Price

Comment on the March 11 prediction:  Prices did fall for a few days, and the situation apparently was different on Thursday morning, as we saw a reset, which didn’t fit my calculations.  So, I am going to say WRONG.

Tuesday, March 21, 2017, 3:30PM:  Prices want to go lower, but they are taking their sweet time.  There’s a lot of $2.26’s around today, and if today’s wholesale drop of 5 cent holds, we are looking at a 0-margin price of $2.13, if I’m doing things right, so we have room to fall.  It is hard to say at this time of year, as we switch to “summer gas”.  Nevertheless, I’m going with the prediction that we won’t see a hike for the rest of the week. -EA (c) 2017 Frontier Theme