Comment on the April 11 prediction: Prices rose to $3.99 on Friday the 13th, not Thursday the 12th, so I am going to grade this 3/4 CORRECT, 1/4 WRONG. Then, prices drifted lower for two weeks, until Thursday’s re-set to $3.89.
Saturday, April 28, 2012, 8:20AM: For educational purposes, let’s take a look at Thursday’s price hike. Completing my Gas Game spreadsheet Wednesday night, I had recorded a NYMEX price of $3.14 (averaging the current and next month’s futures price) and a Chicago wholesale price estimate of $3.00 per gallon. These days, I tend to use the Chicago estimate, and it corresponds to an estimated price to retailers of $3.70. Historically, retailers have gone to as low as 10 cents below current cost before initiating a price hike, and then they usually hike to 10 cents above cost (what I used to call the 20-cent margin price). So, the price hike was a bit of surprise to me, as I was recording prices in the $3.70’s in Grand Rapids, and the upper $3.60’s in Fort Wayne, and the hike was to $3.89 (kind of a 30-cent margin price). It is as if the Chicago wholesale price was $3.10, not $3.00. Further evidence that this was an unusual price hike includes the following: (1) as reported on this site in the comment sections, some non-Speedway retailers were rather slow to agree to the hike; (2) retail prices in Fort Wayne have already dropped at least 6 cents a gallon, and they are at $3.72 a gallon on Fuller Street in Grand Rapids; (3) my brother called from Fort Wayne and complained about Thursday’s hike, which he rarely does.
Looking to next week, wholesale prices jumped a bit on Friday, and retail prices are already all over the place. That feels like one of those situations where some time next week, there will be a price reset ($3.89 again?) that all the stations agree to almost immediately. I’m sure the secret e-mail will say, “No fooling around this time.” -Ed Aboufadel
In Sidney on 25-A there is a Clark station that stayed at $3.55 while all of the other stations in town, lead by Speedway are at $3.79 – $3.78… What kills me is, these other stations have customers!
In the northern suburbs of Cincinnati, OH, there are a lot of stations that never went up. I fact, some have even gone DOWN since Thursday.
The Kroger closest to my house has dropped a penny each day, from $3.60 Friday to $3.57 as of 6:45am today. Of course, all of the closest Speedways are $3.78-$3.79.
Here is a comparison of the slow moving Kalamazoo stations from Friday morning to the most recent report:
* Quick Stop, Portage St. at Stockbridge – was $3.759 at 7:03 a.m. Friday – now $3.799 at 7:55 a.m. today (Monday)
* CITGO, Burdick at Alcott – was $3.799 at 7:25 a.m. Friday – not updated since
* Marathon (formerly Clark), Portage St. at Bryant – was $3.799 at 7:25 a.m. Friday – now $3.829 at 10:38 a.m. Saturday
* Shell, Cork Valley – was $3.799 at 6:37 a.m. Friday – now $3.879 at 10:33 a.m. Saturday
The Kalamazoo average is $3.826 with the lowest price $3.759 on Portage St./Rd., set by the Circle K BP.
The Grand Rapids average is $3.809. Excluding Sam’s Club in Kentwood ($3.679) and Costco in Cascade ($3.689), $3.699 is still the lowest price in Grand Rapids, available at 4 locations near the Circle K on 44th & Eastern plus the Quick Stop in Hudsonville.
The Michigan average ($3.814) is currently ABOVE the national average ($3.809).
The final (4:25) update in the Chicago spot is up 6.01¢ (1.96%) to $3.1196. Excluding the rack adjustment, that puts the Michigan spike line at $3.831816. Including last week’s huge -22.02¢ rack adjustment, the Michigan spike line would be $3.611616. I’m guessing $3.699 is closer to the real spike line.
Patrick reports today: “Tomorrow is the day that all gasoline terminals must only be supplying summer gasoline. Retailers have until June 1 to do so. Don’t expect an increase in price- we’ve already priced in the switchover.”
I guess I didn’t see this one coming. A hike to $3.999 is in progress. The prices for stations that have, as I like to call it, “taken the plunge”, have been reflected on Speedway’s website.
$3.899 rolling Greedway spike in Ohio.
Hmmmmm, hike to $3.89 last week and $3.99 this week!! Glad I filled up last night for $3.67. I can wait almost 2 weeks now for a fill-up.
That $3.579 yesterday morning sure is looking good now.
There was a gas hike in Traverse City, MI today from $3.749 to $3.999. The leader of the pack to raise prices was Speedway.
I don’t know what the Chicago spot was on May 1, but right now it is down 11.82¢ (3.89%) to $2.9225. That puts the Michigan spike line at $3.62289 (or $3.36549 if the increasingly irrelevant rack adjustment is included, -25.74¢ this week).
If there was any legitimacy for yesterday’s reset, it was a one day Chicago thing, as New York is currently down 2.57¢ and has closed down every day this week (settlements of -2.18¢, -2.75¢, and -2.14¢). New York WTI June crude oil is currently down $2.68 to $102.55. Every contract through March 2013 ($105.91) is higher than the preceding month. December 2020 oil is currently $85. If you think oil will be a lot higher than $85 in late 2020, here is an investment opportunity for you (though you will be one of those greedy speculators you are always complaining about).
Regarding yesterday’s reset, Patrick wrote: “I can’t justify it”
Retail prices in Kalamazoo are already down 10¢+ at 7 locations plus $3.789 at the Sunoco (formerly Frontier Gas) in Pavilion Township, reported at 11:11 a.m. today. It is possible that Sunoco never bothered to go up. The Kalamazoo average is $3.972.
In Grand Rapids, stations are as low as $3.679 at 2 locations (Admiral, Wesco) in Sparta. Excluding membership-only warehouses, 7 stations are reported today at $3.739–$3.779. The Grand Rapids average is $3.97.
Thanks to Admiral, Sturgis has the 6 lowest prices in Michigan, ranging from $3.489 to $3.589. The Michigan average is $3.921, 33.6¢ lower than the $4.257 it was one year ago. AAA lists tomorrow (May 4) as the all time average high price for Michigan, set in 2011: $4.259
Tomorrow is also the AAA all time price peak for every Michigan metropolitan area they cover, except Jackson ($4.286 on 5/5/2011) and Marquette ($4.307 on 5/13/2011), including:
– Grand Rapids-Muskegon-Holland ($4.282 on 5/4/2011)
– Traverse City ($4.279 on 5/4/2011)
– Lansing-East Lansing ($4.278 on 5/4/2011)
– Benton Harbor ($4.273 on 5/4/2011)
AAA doesn’t cover Kalamazoo. Somehow, the much smaller Benton Harbor was selected to represent southwest Michigan.
Bloomberg’s mid-afternoon (2:44) update puts the Chicago spot down 15.65¢ (5.15%) to $2.8842.
There are now 10 Kalamazoo area stations reported $3.899 or below, plus the Sunoco in Pavilion Township at $3.789.
Diether, Does this mean that you would think prices should fall pretty quickly if the spot fell that much?
National news reporting gas prices going down. But in GR area they’re going up! Cripes a barrel of oil is around $85 right now…way to rob the public.