Garden Variety Hike for Flag Day

Comment on the June 3 prediction: CORRECT as written, as prices rose to $3.09.

Tuesday, June 12, 2018, 7:30PM: Wholesale prices have been pretty steady since the last hike, but retail prices have given up the reset and we are almost back in price hike territory, with prices $2.85 and below in several places in the area. Expect to see somewhere between $3.05 and $3.09 the next two days. -EA

From $3.19 to $2.71 to ???

Comment on the May 20 prediction: $3.19 on May 22, as predicted. No hikes since then.

Sunday, June 3, 2018, 6:00PM: Oil prices recently maxed out on May 21, leading to a hike to $3.19 the next day. Since then, for a variety of factors, oil has dropped 8% helping gas prices to fall to as low as $2.71 in Sparta. We’ve seen this before, as an on-going drop in wholesale prices leads to retailers aggressively cutting what they are asking for a gallon, keeping their margins razor-thin. As a result, any rise in wholesale prices triggers a price hike. That’s due to occur this week, and with it, a reset back to … $3.09? -EA

Gas Over $3 — Who is Profiting?

Comment on the May 6 prediction: CORRECT about the under-hike on May 8, but not prepared for $3.09 on May 14.

Sunday, May 20, 2018, 9:00PM: In the past year, gas prices have climbed from $2.40 to over $3 a gallon, following oil prices that have soared from $47 to $70 a barrel. Who’s profiting? Clearly oil producers such as OPEC, Russia, Texas, and North Dakota. And how about Valero Energy, an oil refiner and nationwide gasoline retailer, particularly in California and Texas. You could have bought a share of VLO for $62 a year ago. On Friday, the closing price was $120.56. Nice profit for shareholders! I wish I bought some shares, as I worried about $3 gas.

Well, what about the rest of May? Wholesale prices continue their climb this month, and I’m sure they’ll reset prices this coming week, maybe as soon as Monday. At least back to $3.09, and $3.19 is highly probable. -EA

Gas Game Class Is In Session

Comment on the April 18 posting: CORRECT, as prices rose to $2.95 the next day, as predicted.

Sunday, May 6, 2018, 9:00PM: As we bump up against $3 gasoline, let’s review how our calculations work. It starts with RBOB = reformulated gasoline blendstock for oxygenate blending, in other words, the unleaded gas that we buy at the station. The wholesale price for RBOB is set via trading on markets in places like New York and Chicago. In my spreadsheet, I start with the end-of-day RBOB quote that I can find online.

Actually, RBOB makes up 90% of what you get at the pump. The other 10% is ethanol, which is cheaper than RBOB, so I have a spreadsheet calculation like 0.9*RBOB + 0.1*Ethanol. Next is to add on Federal gas tax of 18.4 cents per gallon and about 18 cents to take into account transportation, middlemen, etc. Then, we tack on 6% sales tax, and in Michigan, 26.3 cents per gallon of gasoline tax (to *eventually* fix the roads). Friday’s RBOB quote of $2.12 converts to an estimated cost to gas stations of $2.83. So, if the price is near $2.83, it is time to predict a price hike. Hikes tend to tack on 10-25 cents to that cost that I calculate.

This evening, prices in Grand Rapids vary from $2.68 to $2.95, so we are wandering back into price hike territory again. I imagine the debate in gasoline headquarters is to under-hike back to $2.99, or do a standard hike which would take them to $3.09. Whatever they decide, I’m sure we’ll see a reset this week, probably on Tuesday, so I am going to fill up on Monday morning — $2.70’s on Alpine Ave! -EA

Not Quite Three Yet

Comment on the April 9 posting: Prices rose on April 11 to $2.85. CORRECT!

Wednesday, April 18, 2018, 7:00PM: Oil prices keep dancing higher, closing tonight over $68 a barrel, the highest in two years. So, wholesale gas prices follow, and we are back in price hike territory. A price reset to $2.99 would get margins back to where they usually are after a hike, but I wonder if they’ll do something like $2.95 to be less dramatic and keep the media away. Should I start practicing typing $3+ for May? -EA

It’s One of Those Weeks

Comment on the March 28 posting: Prices rose to just $2.83, and on Saturday, as Big Red was trolling me. Have to mark that one as WRONG.

Monday, April 9, 2018, 8:00PM: Wholesale prices out of Chicago are up again, and we are back in price hike territory. Since this is only Monday, I’m sure we are going to see a hike this week, maybe as soon as Tuesday. At least back to $2.83, but probably higher. Fill up! -EA (c) 2017 Frontier Theme