Comment on the August 18 prediction: Prices rose on August 20 to $2.59, so the prediction was CORRECT.
Monday, September 7, 2009, 6:00 PM: The past two weeks have been very busy for me, but gas prices have been tame, except for the unusual price adjustment a week ago, where Speedway and others raised prices a few cents, but there was no state-wide reset of prices. That is going to come this week, particularly with gas down to $2.26 this weekend in Lowell. I predict a price hike, perhaps as soon Tuesday, to somewhere in the range of $2.49-$2.59. I know many stations are $2.49 today, so maybe they don’t see a hike, but it is hard to be more precise right now. Looks like I am in agreement with Bill. — Ed Aboufadel
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.
Looking at the numbers, the averages here in the Speedway states are low compared to the Chicago spot’s break even price. This is due in part to the biggest climb in one day for wholesale in quite some time, 13 cents on the NYMEX, and 16 cents in the Chicago spot. Friday they went up again, and today is already up by 5 cents.
We may receive a late day spike today, and most definitely will see one by the usual time tomorrow morning. I see $2.70s being widespread, and some $2.80s being possible depending on what the markets end at today.
Comment on the July 6 prediction: As predicted, prices have been dropping steadily, down to $2.25 along Lake Michigan Drive, in fact. So, the prediction was CORRECT.
Sunday, July 19, 2009, 11:00 AM: Retail prices have fallen significantly this month, lagging but in line with the drops in the wholesale price as indicated by NYMEX and elsewhere. However, last week’s rally on Wall Street started to affect the energy markets late in the week, and NYMEX prices rose 13 cents a gallon. We are at the point where rising wholesale prices are colliding with dropping retail prices, which means a price hike is on its way, perhaps as soon as Monday. I predict a re-set to $2.49 a gallon, except for the handful of gas stations still at that price. Yes, I’m talking to you Speedway Ada! — Ed Aboufadel
If you haven’t already, do look at the previous post Ed put out about gouging in Michigan. These are good reads for those interested in the oil industry, too.
Now, on to business. With a spike up in everything oil/gas/diesel, we are very ripe for a spike tomorrow. I’m putting it at about 65% possible. The margins for Michigan and Indiana just fell below 0 today after riding a period of profit taking. It’s possible we won’t see a jump tomorrow as Speedway and the other stations wait for the weekly DOE report Wednesday for which direction we should see for the end of the week. But it’s been a while since the last one, I’m betting on a spike up to the $2.67-2.73 range.
Do fill up tonight/early tomorrow as spike protection.
Yesterday the Chicago spot bounded up to $2.12, sparking the belief in me that Speedway should spike up in all states it was in. Today the Chicago spot dropped back down to $2.07. This puts us in a very tricky area.
Michigan is well above the spike threshold, about 4 cents. Indiana on the other hand is below that threshold, by about 8 cents. We could see Michigan slide by for a second week without a spike, but that isn’t 100% certain as I don’t know if supply issues there are 100% clear.
The rest of the Speedway states are ripe for a spike after going more than a week without one. I expect them to go back up near $2.80, and probably on the low side of that. Since Michigan is still near $2.80 in average, the only reason to spike is from supply issues. It may get back up to $2.90 if that is the case.