Tuesday, June 10, 2003

Futures did jump again on Friday, so it is time to re-evaluate. On June 1, retailers had to be selling the reformulated gas. Refiners had to start making it on May 1. In retrospect, this was adding 4 cents a gallon during May, and now 10 cents a gallon. This is the “Chicago Summer Premimum”. So, in my calculations, I am back to using the 20-cent maximum margin for retailers and, through the end of September, a 10-cent add-on for the summer. That would make the 20-cent margin price today $1.68, and the 0-cent margin price $1.47. Prices are in the $1.55-$1.60 range today, so there isn’t an obvious prediction, but I’ll make one regardless: price hike on Wednesday or Thursday to $1.69. Thursday morning, prices jumped to $1.68, so the prediction was CORRECT. Although I was at work, I saw the price hike at the Speedway web site (see link above).