Tag: prices fall

Ed takes easy way out: no price hike this week

Comment on Thursday’s prediction:  Prices fell below $2, so the prediction was CORRECT.

Tuesday, November 11, 2008, 5:15 PM:  WZZM-13 stopped by my office yesterday, and the best I could say is that when I started the Gas Game, gas was below $1.50, and during the decade, it went up past $4.  For the most part, my techniques to predict price hikes worked in that environment.  The past two months, with gas prices falling more than 50% and with financial companies, the stock market, and the economy falling apart in the background, it isn’t clear anymore at what point Speedway and friends will be back to looking for opportunities to "re-set at a 20-cent margin", as opposed to, "how much should be drop the price today so that we get some business."  It is easy right now to predict each Sunday that the Lions will lose.  I am going to do the same with gas prices:   predict no price hike this week.  At some point, I will be wrong.  (And at some point, the Lions will win.)
 

Still feeling Ike down South

As prices continue to fall here in the Midwest, the South has not yet forgotten the sting and pain that Hurricane Ike brought, roughly 3 weeks ago. Atlanta, GA is still suffering from periodic gas shortages and high prices. The same is occurring in other locations in the South. Here in Michigan it is relatively quiet with prices falling into the $3.50’s.

On the other side of Michigan, prices have dropped as low as $3.27 in Ypsilanti! Will we see that here, and furthermore, will we see under $3 anytime soon? YOU BET! I am definitely expecting prices to drop below $3 between now and mid-November (BUT… this depends on Hurricane season of course!) We also are looking forward to some refinery expansion projects coming online!

Projects due to be completed soon:

  • Sunoco @ Philadelphia, PA (early 2009): Gaining 15,000bpd from a new Fluid Catalytic Cracker unit and 40,000-50,000bpd fro a new HDS
  • Sunoco @ Toledo, OH (end 2008): 10,000-15,000bpd expansion
  • ConocoPhillips @ Wood River, IL (2009): 135,000bpd, Crude Distillation Unit, Delayed Coker Unit projects
  • Holly @ Navajo, NM (Q4, 2008): 20,000bpd expansion
  • Motvia @ Port Arthur, TX (2008): 45,000bpd expansion (plus an additional 325,000bpd to be online in 2010!)
  • Holly @ Woods Cross, UT (Q4, 2008): 20,000bpd expansion
  • Sinclair @ Salt Lake City, UT (2009): 60,000bpd expansion 
  • Big West Oil @ Bakersfield, CA (2008): 19,200bpd (new Fluid Catalytic Cracker), 25,000bpd (Distillate Hydrotreater), 9,000 (Alkylation unit)… total of 53,200bpd!
  • CHS @ Laurel, MT (Aug 08): 15,000bpd expansion

Wow! Going back in time, we’re also at 17,610,000 barrels of daily capacity at U.S. refineries, almost 500,000bpd more than when Katrina hit in 2005, and the highest amount in history!

With slowing demand, I’ll bet some refiners are having second thoughts…

Look for prices to continue to fall!

I filled up as a precaution, should you?

With prices falling (and rightfully so) to the $3.60’s (suburbs) and $3.70’s (GR area) and much lower in other parts of the state, is a hike likely anytime soon? It could be… chances are really 50/50, but I personally filled up just in case so I wouldn’t get caught losing too much money if prices came down. If any hike occurred, it wouldn’t be more than $3.79 or so.

Nationally, there are still major refineries without power and that are closed in Texas and Louisiana. Refineries operated at a record low 66.7% of capacity last week, as reported by the Department of Energy in its Weekly Report.

We’re hurting folks, but not as bad as those dealing with REAL GASOLINE shortages in Georgia, Tennessee, areas of the Carolinas, and the upper South. They are encountering major supply issues as refiners are slow to pickup the pieces.

Nationally, I expect prices to rise up-to a dime more before things calm down. I think realistically, we won’t be back to normal until mid-Winter. Supplies of gasoline in storage are at a record ALL TIME LOW dating back to 1969. Folks, this is pretty unprecedented.

Other news, TheGasGame.com will be making a splash onto Washington, D.C. airwaves as Ed was called for a radio interview! Cool! We are also looking to add another major source of information (this is huge and I’m quite excited about it). The source may provide inside information to the oil/gasoline industry and will fuel my curiosity to learn more, which will ultimately benefit our audience here.

Be sure to stay tuned to the REFINERY STATUS page as well. It will be updated as necessary or as new information becomes available. It is quite accurate at this time.

Patrick

Oil prices falling uncontrollably? Update on refinery damage!

Oil seems likely to continue its fall tonight and tomorrow as Big Oil assess its refineries after Hurricane Ike.

Grand Rapids prices should head WELL South of $4!

Also according to Reuters calculations, here are some of the numbers that have impacted gasoline prices:

CUMULATIVE IMPACT OF GUSTAV AND IKE

*20.48 million barrels of crude oil

*102.79 billion cubic feet of natural gas

*33.06 million barrels of refining (counting only plants completely shut) 

*99.9 pct Gulf of Mexico oil output

*93.8 pct Gulf of Mexico gas output

*15 refineries shut, 24.6 pct of US capacity

*1 refinery, ConocoPhillips Sweeny unit, restarting

*5 refineries representing 7.7 pct of US capacity at reduced rates

*Some ports, Gulf Coast pipelines ramping back up

*At least 55 ships await entry to Houston

*Oil drops $5 on financials, Ike

*11 rigs, platforms damaged or lost: USCG

*Louisiana Oil Port restarts, but power limited

*Anadarko restarts Independence Hub

*Seaway crude line restarts

*Henry Hub force majeure still, some damage

*Refineries showing little damage

*Shell evaluating restart sked for Capline

*********************PIPELINES, GAS PLANTS************************

HEADLINES:

*TEPPCO partially back

*Explorer expects return to normal by late Tuesday

*Magellan some damage, assessing its system

*Seaway restarts as planned

*Shell evaluating full flow sked for Capline

*24 U.S. nat gas plants, 12.23 Bcfd, shut – DOE

*10 U.S. nat gas plants, 4.26 Bcfd, at reduced levels – DOE

PIPELINES, OTHER FACILITIES SHUT

*SPR Bryan Mound, Big Hill, Tex; Hackberry, La,

*Shell Houston-to-Houma crude line

*Centennial Pipeline products line

*Portions of ConocoPhillips pipeline system in Texas

*Dixie Pipeline propane line from Texas to Louisiana, Iowa

*Enterprise Cameron Highway and Poseidon offshore crude in Gulf

*Longhorn Pipeline products line

*Portions of Marathon Pipeline system onshore, offshore Gulf Coast

*Enbridge: Four pipelines force majeure

REDUCED RATES

*Plantation pipeline at reduced rates

*Colonial restarts distillate line after Ike, mogas down

Math/Stats/Data

This page is filled with great information on the math behind gasoline prices, the stats of hikes, days they are most likely to occur, and the data behind why prices rise and fall. This information is about as raw as it gets, meaning it is hard to understand for some who haven’t looked at it before. We’re posting it to show what we do to try and win “The Gas Game”.

First of all, see how Ed calculates the expected price. It is a formula that takes in many numbers from different sources.

Secondly, see what day a gas price hike is most likely. Ed’s data reflects over six years experience of monitoring gas prices.

Third, try and read the Weekly Petroleum Status Report from the Department of Energy. This report can greatly effect local prices and market prices. It is released typically on Wednesday mornings at 10:35am Eastern Time.

If you aren’t bored yet, another good summary of a week’s petroleum usage is the data report “This Week In Petroleum” (Gasoline Section). It is raw numbers, graphs, and data from the nation’s oil companies and refiners. It contains some of the same information found in the WPS report.

Some other good information and data about gas prices can be found on gasoline retailer’s own websites. Some retailers even list their current fuel prices at some of their stations. Some that do this are Speedway, Pilot, and Flying J. Definitely monitor many stations across the country for a large snapshot!

All of these pages that are listed are a GREAT source of information for why gasoline prices go up and down. The government reports especially play in to prices. After the reports are released, traders read them and see if there are any surprises. Before the reports are released, traders are typically polled to check their expectations of the governments report. If the report is worse than expected, traders buy oil and gasoline contracts, and wholesale prices rise. If the report is better than expected, traders sell oil and gasoline contracts, and wholesale prices fall. This is part of the reason why most gas price hikes are Thursday: the report is released Wednesday, traders react, and pump prices either rise the following day or they remain the same or fall if the report is good.

Today’s Grand Rapids Gas Price Trend:

Some more good resources to check out:

Oil and Gasoline News from MarketWatch | Speaking of Oil with Tom Kloza | Energy Information Administration | AXXIS Petroleum- Price Services | List of U.S. Oil Refineries, Capacity and Location | U.S. Refinery Expansion Plans/Updates | Michigan Gasoline/Product Pipeline

Helpful Images:

Areas where RFG (Reformulated Gasoline) are required by the EPA

Areas where RFG (Reformulated Gasoline) are required by the EPA

More information and links to data may be posted here at any time, so stay tuned! In addition, if you have any good information/stats/data that you think should be added here, e-mail Patrick. The address is on the left side of the main index page.

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