Edit: Speedway has just hiked to $3.95 in Michigan; while not totally shocking, this is something that might have been expected. The Gas Game gets quite difficult to predict at times like this!
Another disappointing report from the Dept. of Energy this week, we can look for gasoline to trade higher today.
Perhaps due to the Hurricane/Tropical Storms last week, the DOE reported refinery utilization at just 85.9%, with crude oil inventories falling 400,000 barrels (LOOP was closed [Louisiana Offshore Oil Platform] last week) which likely altered crude import numbers, but gasoline… OUCH! Gasoline inventories fell a massive 6.4 million barrels last week, putting us now in the lower part of the average range, and putting us almost exactly at the same amount of gasoline in inventories as this week in 2007.
In a month we’ve consumed 14.3 million barrels (600.6 million gallons) of gasoline more than were refined. Amazing! Look for that stat to perhaps spook traders as they see some bullish numbers coming in. I definitely expect gasoline to trade higher today, perhaps triggering a hike in the Grand Rapids area… more on that later today IF necessary.
Also, the SPR is STILL adding barrels to its massive storage?! Didn’t the Dept. of Energy state that with oil prices so high they were going to delay deliveries to the SPR in mid-to-late July? It hasn’t happened! This week the SPR sits at 707.2mb, last week 706.8mb and last year at 690.3mb. Just more empty promises from government to do something positive for the market.
Look for gasoline to pull oil higher as traders get some bullish news.
PS- Midwest PADD storage fell to 48mb this past week, look for the Chicago Premium to start hurting soon!
After enjoying lower prices for a few weeks, I’m sad to announce I’m expecting a hike to $3.99 around Grand Rapids soon. Perhaps as early as Monday, or they could wait. Prices have been creeping up, we have a tropical storm in the Gulf that’s pushing prices higher (not as much as it could… small storm)
Be sure to fill up soon. I was “lucky” to get gas for (are you going to be upset at me?) $3.64 Saturday in Fremont with the help of a Speedway Credit Card… that may be as low as we see it for sometime now as Hurricane season kicks into high gear.
I can’t believe its August already and I’m still seeing gas prices well over $3.50. Oh well.
EDIT: Prices are sliding on the market today. Looks like we will dodge a price hike!
August 4, 2:30pm EDT
EDIT: August 5: Prices didn’t decrease fast enough for Grand Rapids, a price increase is now at 50/50 odds!
Tropical depression #4 has formed today in the Atlantic with strengthening definite. This is the point where wholesale prices may find support for $3/gallon again, so be weary! If possible, grab some gasoline jugs and fill them- it could get sticky in a few weeks (higher gasoline prices).
Stay with me for the latest as I begin to track hurricanes (I will be watching Bill’s Blog meticulously for hurricane season updates!)
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The DOE report which was released this morning at 10:30am due to the holiday was a relatively good report.
I will make a few highlights.
- Refiners operated at 90% of capacity last week, a bit low, but above the psychologically significant 89.9%.
- Gasoline production increased (albeit small) to 9.4 million barrels per day (demand is 9.6 million barrels per day)
- Oil imports averaged 10.8 million barrels per day, a nice change of pace. Anything over 11mb is quite significant.
- Gasoline imports averaged 1.4 million barrels per day last week, above the 1.1mb average.
- Crude Oil inventories rose 3.1 million barrels to 354 million barrels, the highest in well over a decade, and nearly 13-percent higher than the 5-year average.
- TOTAL INVENTORIES ROSE BY 8.3 MILLION BARRELS (nice!)
Now we have the good. The bad? Traders turning relatively small, insignificant news into a big deal. A girl was kidnapped in Nigeria today, the daughter of a oil worker. While its news, it certainly shouldn’t be pushing oil higher; I mean- COME ON! Also in the news, Iran. What now? We haven’t heard anything new in weeks! Sure the threat of sanctions still exists, but WHY is this “new” news? Its not! Next story! Hurricane Season. This is the ONLY one of these three stories that should be putting an upward pressure on prices, however, we haven’t even seen an organized storm, much less a tropical storm, coming from the Atlantic.
Overall, look for prices to hang out today perhaps, but then I will be looking for a small downward correction in oil at least as traders realize the junk news is insignificant compared to the huge amount of inventories in the U.S.
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Well after a good DOE report, and after oil fell over $1 per barrel,
gasoline started to trade higher. Why? Not exactly sure, but traders
could be getting back in the market fearing that with the new tropical
storm that this year will be rough on the oil infrastructure in the
Gasoline ended up 4 cents today.
I checked my “benchmark” gas station in Burns Harbor, Indiana, and they
are sitting at 3.17 for regular unleaded. This worries me. Usually
Grand Rapids is higher or sees a hike when this is the case.
Its not for sure, but we might see a small hike tomorrow to 3.19-3.25. Its like 65/35 odds right now in favor of a small hike.
Either stay tuned to GrandRapidsGasPrices.com or fill that tank up
tonight. Gas can be had for 3.09 in the Fuller/Michigan and
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Hope everyone is having a fabulous weekend.
Thought I would e-mail everyone and let them know the latest with gas
prices. I just checked the NHC latest forecast for soon-to-be
Hurricane Ernesto, and it doesn’t look good at all. It appears that
Tropical Storm Ernesto has sucessfully fought off a lot of windshear
(and still has some fighting to do!) and is continuing to gain
strength in the very warm Gulf water.
I have made an image of Gulf Oil drilling wells that would be
effected. Rigs are orange dots, refineries are black dots. You can
see the current forecast isn’t very good. The only thing we can hope
is that windshear will force Ernesto to lose some of its strength or
not let it be as strong as it could be.
You should see an image below of the aforementioned rigs/refineries.
Now, at this point, it is looking like we could see a major price
hike early in the week. The wholesale market opens for electronic
trading Sunday night, and I will be watching to see what happens, and
will update you.
Right now, Ernesto’s estimated strength is what will determine
prices, as it appears it will be heading for the gut of oil
production and refining. Worse case scenaro is that we see over $3