Tuesday, October 25, 2005

1:30 PM: I predict a price hike on Wednesday or Thursday. We’ve seen prices fall dramatically this month, with the last hike being to $2.94 on September 30. Today, you can get a gallon in town for $2.37. This drop in retail prices has followed the drop in NYMEX prices, but retail prices have remained above the 20-cent margin price I calculate, reflecting a signifcant difference between New York and Chicago prices. I am not be able to tell what the “fudge factor” is right now, but based on the Department of Energy web pages that compare New York vs. Chicago wholesale prices, it is at least 8 cents. With NYMEX up today, the numbers are lining up for where a price hike could occur, so it probably will. My guess right now is a new price somewhere in the neighborhood of $2.49. I practice what I predict and filled up Thursday morning for $2.35. That was the WRONG thing to do, as prices got as low as $2.21 on Sunday after no price hike.