Comment on my June 11 posting: Prices made it to $2.69 last week, and then lower this week, so my prediction was CORRECT.
Tuesday, June 23, 2009, 4:30PM: The stock market/energy market correlation continues. Stocks topped out recently on June 12, a day after the price of a barrel of oil did, while NYMEX waited until June 16. Since then, NYMEX has dropped 20 cents, and Chicago wholesale prices are down nearly 50 cents since June 4. That means the good news for us will continue, as the 0-cent margin price using Chicago wholesale prices is about $2.39. That means prices will continue to fall by several cents a day at least for the rest of the week. Hey, Ada and Lowell — get with the program!
— Ed Aboufadel
Thursday, June 11, 2009, 1:15PM: The extreme price jumps in the Chicago market continue to sort themselves out, and this report indicates that while NYMEX has been climbing (follow the UGA ETF for a quick read on that), Chicago wholesale prices have been falling. So, using a $2.07 NYMEX/Chicago wholesale price, I calculate a range of $2.61-$2.82, which means I can comfortably predict that prices will continue to fall into next week, at least to $2.69.
I see the prices falling in the next couple days at least, since the Chicago spot has fallen 21 cents since Thursday. The supply problem in the Midwest seems to be easing, and we have seen prices fall in some areas. Since I have had a report that Indianapolis stations recorded a negative profit for the month of May (a time retailers are supposed to gouge people coming in for the Indy 500) it’s not likely we are going to see as fast a fall as you would hope, as stations will look to recoup their losses.
Keep an eye on what the Chicago spot is doing on our “Today in Oil” page. As long as it continues to fall back toward the NYMEX RBOB, we too should see prices fall at the pump.
Monday, May 18, 2009, 8:45 PM: I just updated my spreadsheets, and NYMEX gas prices were up 7 cents today. The new 20-cent margin price is $2.49. There’s definitely a price hike coming, tomorrow or Wednesday, to something above $2.39.
Sunday, May 10, 2009, 9:00 AM: The stock market climbs 10% in two weeks, with bank and energy stocks soaring even more, and wholesale energy prices do the same. Last week, NYMEX climbed by 19 cents a gallon, which led to the Tuesday price hike to $2.29 and the slow motion price hike this weekend to $2.34. With the 20-cent margin price now at $2.43 … fill up today for $2.29 or less!
Looking at morning numbers briefly this morning before an interview on WOOD AM1300, I think I might have to announce that I’m expecting a price hike soon to $2.19! A quick look at closing prices on the market from late last week and yesterday:
Thursday close $1.42
Friday close $1.47
Monday close $1.54
As you can see, wholesale prices are up a whopping 12-cents since just Thursday! While I believe Speedway’s price hike Friday to $2.15 was over done to provide more profit for their Saturday/Sunday Speedy Rewards discount, I now believe that they will raise prices again to keep up with wholesale cost.
Another contributing factor is the switchover to Summer blended gasoline which costs more to make. Refiners were required starting Friday (May 1) to only sell Summer blended fuel after that time. Retailers have until June 1 to make sure they have it in their tanks.
At last check, the Chicago market is suffering a huge Chicago Premium for RBOB gasoline (ethanol blended gasoline, which nearly all retailers sell). The Chicago region was paying nearly 18-cents more per gallon than any other region. Chicago is currently trading RBOB Unleaded at a 21-cent PER GALLON premium to NYMEX pricing.
I’m led to believe we’ll see a jump to between $2.15-$2.25. I’ll pick $2.19.
Gasoline demand is starting to rise so don’t think this is a shock to see higher gas prices. At least we’re not paying $3 or $4/gallon!