Tag: oil

Lower prices expected, but Ada & Lowell remain high

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

Expect prices to fall to at least $2.69.

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.

Prices fall as supply issues ease

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.

A Rant About Shortages and Speculators

Comment on my May 27 posting:  On Thursday, May 28, prices started to rise at the end of the day to $2.75.  Since then, there have been hikes to $2.85 on Tuesday and $2.95 today.

Thursday, June 4, 2009, 6:35PM:  I haven’t been very helpful with the price hikes this week, but Bill has!  Let’s reflect a bit on the past five weeks.  We have gone from $1.99 a gallon in Standale on April 27 to $2.95 a gallon today.  Why?  First we have numerous reports of mild gasoline shortages in the Midwest.  Good job, gasoline industry, in managing this vital part of our economy!  Second, the rise in gasoline prices has mirrored rises in the price of a barrel of oil (almost $20 a barrel) and in the Dow (almost 700 points) since April 27.  Yes, as I’ve written before, we are dealing with speculators again.  The price is being influenced by people who are demanding oil and gas as investments, rather than as fuel.  While in the long run, higher prices will inspire new and cleaner fuels, which I support, in the short run, just as we are digging ourselves out of recession caused in part by financial geniuses who bought and sold “default swaps” and other products they couldn’t afford to support, prices spiking to $3 could cause it all to grind to halt again, like it did last summer.  Great.  Hopefully these artificially high prices in Chicagoland will soon attract cheaper gasoline from other parts of the country.

Let me reiterate my target again for May and June as prices climb to $2.29

Ouch! $2.29 across the Midwest with my benchmark station in Burns Harbor, Indiana skyrocketing overnight to $2.37/$2.49/$2.61! Wow! While the Midwest is suffering from regionally high gas prices, the higher prices should help funnel fuel from the South where refiners are thirsty for a better margin on fuel.

I hadn’t made it official on TheGasGame, but I had predicted on March 23 on GasBuddy that May/June would bring oil prices to $55-$65 and nationwide gasoline prices to $2.50.

This is my official target for the time being and I am working on a prediction for July/August at this time.

For the next few weeks, I see absolutely no reason for gas prices to rise over $2.50. The market is well supplied with oil and refiners are increasing their crack spread (profit) on making gasoline.

Hold in there folks. We should see a slower rise than we’ve seen the last week.

Patrick

I’ll be stepping out for a short time…

After a few busy weeks with a lot of things going on in the background here at TheGasGame, I’ve decided I need to temporarily dedicate more time to those things. Obviously, this means I’ll be away or working to get some things accomplished over the next couple days/weeks.

While I’m away, you can continue to count on posts every so often as needed, but several items will not be updated, such as “Today in Oil” and “Refinery Status”. I’m not sure if I’ll be gone for a few days or a week or two.

The time taken away from TheGasGame will allow me time to concentrate on opporunities that have arisen to me in the last couple months. I’ll definitely do my best to let everyone know what’s going on- so stay tuned here.

For now, I’m sure Ed will keep posting when needed. I want to thank everyone for taking the time to read our thoughts.

Patrick

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