Category: Commentary

Still keeping it under $3

Comment on the May 5 prediction: Prices dropped slowly that week, as CORRECTly predicted, but then we had a pair of hikes to $2.99.

Monday, May 27, 2019, 11AM: Where has this month gone? We’ve been bouncing around between $2.69 and $2.99 here in Michigan, while last week’s action in the futures markets suggest lower prices ahead. On Thursday the 23rd, oil prices dropped considerably, and in a sign that this would help gas prices go lower, Valero stock went down 6%. I think we’ll see retail prices trend below $2.70 as the week goes on, which is already the case in Comstock Park, and that will get us to the end of May. -EA

Taxes per mile instead of per gallon?

Comment on the April 20 prediction: It was absolutely CORRECT, as prices rose to $2.99. But, I missed the hike on May 1.

Sunday, May 5, 2019, 11AM: Gas prices in California are over $4, and they are ready to go over $3 here. We may get a break short-term, as oil prices have dropped from $66 to $62 a barrel recently. Meanwhile, with the idea of a large per-gallon tax being proposed by the Governor, there is talk of other ways to think about raising enough revenues to keep the roads fixed, such as per-mile changes and congestion pricing. The Prius drivers of the world, getting 50-60 mpg, end up paying much less per mile that a typical car.

Meanwhile, here is an interesting graphic from OPIS that indicates what can influence gas prices along each part of the chain.

Only prediction today is that gas prices should drop slowly but steadily this week, and I doubt we’ll see a hike. -EA

Easter Candy Today; Fill Up Tomorrow

Sunday, April 20, 2019, 8AM: They gave us a break this Easter weekend, but we have the 0-margin price in the neighborhood of $2.75, and retail prices continue to drop. You can find gas below $2.60 in several areas of west Michigan. Expect a price hike on Monday or Tuesday, back to $2.95 or $2.99.

Meanwhile, if you are wondering how information about gas prices is shared to retailers, follow this link to PricePro.  -EA

Gas Prices Back Off of $3

Tuesday, April 16, 2019, 3PM: Retail gas prices topped out at $2.99 last Thursday, as oil closed in on $65 a barrel. Since then, the markets have calmed down a bit, and some places in west Michigan didn’t embrace to move to $3 gas. As of this afternoon, gas is $2.54 in Comstock Park, but there are many places in the $2.90’s, too. By my calculations, the 0-cent margin price is about $2.70, which means that if enough stations were near that price today, a hike prediction would most likely come true. Instead, with the wide range of prices, I won’t make a prediction today, but I’ll head up to Alpine to fill up soon. -EA

Mmmmm, profits!

Comment on the March 17 prediction: There was a hike, but it was to $2.85. Then, on Monday the 25th, to $2.95, which I did not expect. So, score this 1/2 CORRECT, 1/2 WRONG.

Saturday, March 30, 2019, Noon: It has been quite a nasty ride the past two months. At the end of January, you could buy a gallon of gas for less than $2 at certain Michigan stations. Today, we are sniffing $3 a gallon, and the hikes have been coming fast-and-furious. The price of oil has not been a big contributor, up only 10% the past two months. Instead, we have the usual Jan-May move up in gas prices and some “sorry not sorry” refinery problems. The biggest contributor, though, seems to be more aggressive pricing to raise margins. There were hints already in January, and I can see it in the spreadsheet I maintain. Moving into this coming week, although we’ve seen Monday or Tuesdays hikes every week lately, it appears that margins are high enough this weekend to keep the retailers at bay for now. By Thursday, who knows? Even the President is starting to notice. -EA

More Of The Same Expected This Week

Sunday, March 17, 2019, 5PM: Speedway’s aggressive play this year has continued into March, so I am suspecting a price hike is in the mix soon. Since the last price hike last Monday, wholesale prices have rose another four cents, while retail prices have slipped a dime. That would set us up to see a hike to $2.75 this week. Consider that a prediction. -EA (c) 2017 Frontier Theme