Chicago Spot: $2.11 UP 0.0616
Fair price adjustment: 0.7948
Fair Price: 2.7662
Average selling price 2.7150
Margin over cost + profit: -0.0512
We are in dangerous territory. The commodities market is up yet again, this time on a weak dollar. Fair price is at break even, which can mean a spike is close at hand. But, we have already had a spike this week, so another one is not as likely to come. But we just came off a weekend where the margin was thin, and Speedway might not want to repeat that again. But the last time commodities spiked up like this (in May) Speedway lagged behind so much that Indiana gas stations lost money on the sale of fuel. But… well, you get the idea.
It would be prudent to watch the prices as they may climb going into the weekend. Indiana could see $2.75-2.80, Michigan and NW Indiana could be 5-10 cents higher. Or, we could see prices stagnate or drop very slowly… only the people in Ohio know what will happen.
Chicago Spot: $2.03 UP 0.0079
Fair price adjustment: 0.7914
Michigan Fair Price: 2.6792
Michigan Average selling price 2.5970
Margin over cost + profit: -0.0822
The dam has gotta break sometime. Gas usually falls at least 2 cents on non-spike days, but over the weekend it didn’t budge, or only went down a couple cents, depending on where you live. The average in Michigan is only .3¢ cheaper than the Thursday spike price. Stagnation like that shows stations are feeling the pinch. The fair price is 8 cents above the current average, too.
Expect a spike tomorrow. Most of Indiana will see 2.65-2.70, while Michigan will be 4-6 cents higher, and NW Indiana will be 5-10 cents higher.
Chicago spot gasoline:
Chicago Spot: $1.78 UP 0.0978
Costs and taxes adjustment: 0.7772
Fair Price: 2.4082
Average Michigan selling price 2.3820
Margin over cost + profit: -0.0262
USA Average: $2.479
Michigan average ( $2.382 ) is $0.097 under USA average
A spike is looming, with a negative margin in my fair price formula. It’s quite possible that the run-up on the markets won’t transfer over to your local rack prices, but I’m 90% sure of a spike tomorrow.
Expect prices anywhere from $2.37-$2.42 in Indiana, 5 cents higher in Michigan, and with the Chicago RBOB only 1 cent over regular, it could be anywhere from 0-5 cents over the Indiana price.
Chicago spot gasoline:
Michigan Fair price: ( $1.8608 +$0.6367 ) = $2.4975
Average selling price – fair price: ( $2.487 – $2.4975 )=
Margin over cost + profit: -$0.0105
Wholesale is up again, almost 9 cents in the last two days. Margins have dried up to almost nothing/negative numbers. If you are needing gas, I’d fill up tonight or early tomorrow. We could spike up to the same levels seen during the last spike, although the NW counties in Indiana may get a better break since the Chicago RBOB spot is only 2 cents over the Chicago Spot.
The stat line goes like this:
Fair price: ( $1.9374+$0.6413 ) = $2.5787
Average selling price – fair price: ($2.537-$2.5787)=
Margin over cost + profit: -$0.0417
In other words, for Michigan, you are selling at more than a negative 4 cent margin by my numbers. In Indiana that is more than 6 cents, and that’s with 5 cents taken out of the fair price due to the Indianapolis rack being so much lower than Chicago’s. This usually means spike. But we are going into a weekend, and Speedway rarely goes up on Saturday and never has on Sunday since I have kept track.
I have seen weekend spikes up in price from local retailers. Companies like Schmuckal Oil in NNW Lower Michigan, Wesco in W Lower Michigan and Atlas Oil in Indiana, a few in Michigan and Kentucky (check out our links page to see their websites and see if their is a station in your area.) Meijer also has spiked up on the weekend.
My point is we are very close to a spike, and we may see the price spike up over the weekend/early next week. Keep an eye on your local retailers, as they may spike up, even if Speedway doesn’t. Good luck out there.
Comment on the August 3 prediction: Prices rose to $2.69 the next day, slightly below the $2.72-$2.82 range I predicted. But, I’ll call it CORRECT regardless.
Tuesday, August 18, 2009, 4:20PM: I spent last week near Cheboygan. Prices were frozen at $2.69 up there all week, while the games continued in Grand Rapids. Let’s see where we are today. Retail prices range from $2.41 to $2.64 right now, according to GasBuddy. NYMEX indicates wholesale prices around $1.88, which leads to a calculation of $2.41 as the 0-cent margin price — of course! So, I think we’ll see a hike before the end of the week, with the new price in the neighborhood of $2.59. — Ed Aboufadel