Twelve hours ago, I posted the following to grandrapidsgasprices.com: “This is how the logic of this week looks to me right now: Catagory 5 Hurricane Katrina –> shut down of refineries on the Gulf Coast and worries about New Orleans being damaged –> upward spike in oil and gas prices on NYMEX and elsewhere –> $2.99 a gallon.” Since then, trading in oil and gasoline started up, with oil going over $70 a barrel, and wholesale gasoline trading at $2.1215. Oil has back off since then, but I don’t have an update on gasoline. Using the $2.1215 price, along with a fudge factor of +11 cents that has been typical this month for some reason, I get a 20-cent margin price of $2.99. Now, this jump due to Katrina may be a one- or two-day spike, but every spike in wholesale prices has been passed along in the past. So, I figure we see a price hike today, and I wonder if Speedway will get clever and make it $2.98 so that Shell and BP can post $2.999 and not $3.009. It wasn’t until Tuesday afternoon that prices shot up. Most places went to $2.999 (and not $3.009), but the Meijer’s stations are showing $2.89. I’ll consider my prediction half WRONG and half CORRECT.
Monday, August 22, 2005, 7:45 AM: Although we’re learning that we need to be careful about people in the industry making these predictions (what is this, twice this summer?), my new friend from last week had some good information about wholesale prices in Michigan being higher than what is being indicated on NYMEX. This explains to me why prices have been slow to drop the last several days, as the NYMEX numbers suggest we could go down to below $2.50 before the next price hike. So, I feel like I am flying blind here right now and I’m going to beg off making a prediction. Due to the school year getting started up again, this will be my only posting this week. A price hike to $2.75 was initiated on Thursday, but it wasn’t embraced with enthusiasm by the gas stations. By Sunday evening, you could find gas for $2.52.