After yesterday’s spike up to $2.85 we saw the bottom completely drop out of the Chicago market, and wholesale gas jump 13 cents to $2.29. This was for delivery to the Wolverine Pipeline, which covers the lower part of Michigan. With Speedway jumping up to $2.85 before this climb, and the price being specifically set for Michigan, $3 has just jumped into the realm of possibility for Michigan drivers.
And it isn’t just me saying this. Some guy calling himself a petroleum analyst for GasBuddy.com, Patrick DeHaan, also believes this is so. He said so on WOOD-TV 8.
So, I’d hate to say this, but $2.85 or less is looking pretty good come tomorrow at 9:30, as we may see Speedway break the $3 barrier, or come close at $2.99. Hold on to your hats, the pain hasn’t stopped, yet.
I am not sure what this means for Indiana and Ohio. It is quite possible we, too shall see a spike tomorrow as well. But it is hard to tell where we are getting our gas from. NY Harbor, Group 3 and Gulf Coast gas prices are almost 35 cents lower than the Chicago spot, and I wouldn’t be surprised if gas from one of those areas makes its way to this area. The price in this area will be lower, but to what extent? A spike is a possibility, but I’m thinking it would be much like last week, where we will ride out the last spike. But jumping into the mid to upper $2.80s wouldn’t shock me at all, either.
A fire ignited Friday afternoon around 2:30 p.m. at the Tate and Lyle corn refinery plant in Loudon, according to Loudon Police.
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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!
EDITED AN EARLIER POST:
Prices are $4.25 @ benchmark in Indiana! GET GAS!
While trees are coming down in Grand Rapids at this hour, I will unfortunately predict that our gas prices will rise. (I’m watching the TV… rain between 6-24″ deep in spots and people are willing to chance HYDRO-LOCKING their engines to get around town? Are people stupid?)
Let’s jump to the market: prices are rising today even with the DOE reporting gasoline stockpiles rose, however, oil inventories *DID* drop more than expected.
Look for $4.29 tomorrow, NOT because of July 4th, but because its like any other situation… prices climbed on the market, they will climb at the pump.
My Indiana benchmark has dropped four cents since my last writing, down to $3.69. Is there some reason their wholesale costs are that much higher than Grand Rapids? The station in question in Indiana is definitely a high volume station, so their wholesale costs would be more appropriate to benchmark against compared to a smaller Indiana retailer, but as I said, we still average a good dime and change over their pricing.
Either they will drop again or we’ll see a rise here in the next couple days…
Stay tuned to WOODTV8 tonight at 5 to hear more, as well as WOODAM1300 tomorrow morning as prices continue to break record highs.