Expecting a Price Reset

Comment on the September 6 prediction:  Prices did not rise until September 10, so the prediction was WRONG, or, to be kind, EARLY.  Prices have drifted down since the 10th.

Saturday, September 22, 2012, 8:45PM:  Gas prices peaked at $4.09 in Grand Rapids on September 10, and have fallen slowly but steadily since then. Oil has had its up-and-downs this month, and jumps in the wholesale price of gas at the end of this past week has put us into a price-hike zone.  I calculate that gas stations are paying $3.96 a gallon this weekend, while prices are in the $3.80’s, so we should get a price reset on Monday or Tuesday.  It shouldn’t be any worse than the $4.09 from two weeks ago. –Ed Aboufadel

Updated: September 22, 2012 — 8:41 pm


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  1. A spike is indeed occurring today. The new price: $3.999. The first in the Lansing area to go up: 2000 Lake Lansing and Wood.

  2. $3.899 in Ohio. Will be interesting to see if the stations in the $3.40’s, on the west side of Cincy will jump. (I’m sure they will)

  3. Greedway just went to 3.99 in Kalamazoo

  4. Am I the only int to notice that the low-price period of the spike price is getting shorter, meaning that the drop from max price to min price seems to hold steady near max for much of the time, then a couple days of the min price ( subject to zone pricing of course) and then again WHAM! spike once again…

    In other words, prices seem to be holding on high longer…

  5. $3.89 it appears to be the new price here in Fort Wayne.

    This is strictly anecdotal…….You may be right, but it’s not so easy to see that it could be called a certainty.
    If you look at the graph below, the peaks on the left are pointed (fast drop-off), while the troughs are rounded (sticking low longer). On the right of the chart, the last couple months, the sharp edges are at the troughs (fast to go up) while the rounded peaks could indicate an extra day or two at the peak price.


  6. If we had charts or data with daily resolution it may be easier to spot. I seem to notice that nobody seems ‘eager’ to drop prices by much following a spike for a few days, then a very slow drop takes place (the drop is faster if you’re in a ‘low zone’ then a couple days before the next spike you may see a massive (yea right) drop and then back to spike.

    Case in point. We were stuck for quite a while in high here in many ‘high zones’ in Indy while the low zones were comfortably 20c less than us. Then by the time we got to 3.79 or 3.72 or so places like Kokomo were in the 3.58 range (for a couple days) then wham! 10% higher…

    So it seems that something else is being cooked in addition to the usual spikes. I feel zone pricing may be taking a lot more of a lead role in fleecing us, since spikes (by now) are easier for consumers to get around. Not everyone has the opportunity to fill up in Tipton for less.

  7. So, looking at Chicago spot closing at $2.95 yesterday:
    Speedway states are sitting at $1(+/-, depending on state) above spot.

  8. Any idea what Chicago spot’s doing today?
    NYH is up 12 cents, while oil is down $1.81.
    Just watched NYH jump 4 cents in 2 minutes.

  9. Danaher Mid Continent is up 2.3¢ a bit past noon today. Current price $2.9829. Add 72.5¢ to that for a projected zero margin retail price at stations in Indiana. Add 71.5¢ for the zero margin retail price in Michigan, and 59.5¢ for Ohio’s projected zero margin price for retail gasoline. Prices usually spike up when the stations are losing about 10¢, give or take.

  10. Thanks TimmP

    Apparently there has been a refinery explosion in Canada today. That caused the temporary jump in NYH. I wonder if Speedway will use that as an excuse to jump tomorrow.
    Wouldn’t put it past them.

  11. Indiana prices are in the 3.89 range as we speak… So we have Another 19c to zero or 29c to reset and, on cue, a refinery in Canada that likely exports zero to the USA has an “explosion”.

    Move along, nothing to see here. Expect price of gas to stay in the 3.80’s while crude climbs back to the mid 90’s…

  12. Hi Ed – for at least a couple of years, every day I go to oil price.net and check price of barrel of oil – heating oil and gasoline. On gasoline (and heat. oil) at one time I thought it stated that the price quoted was “at the harbor” (maybe that was a diff site). On the gasoline price I could add seventy cents to it and it was (or very close) to the price at the pump in N.E. Pa(very close to N.Y. state line. Over the past few months that spread has risen to around one dollar. Also the price at pump jumped quite a bit due to hurricane Issac but the price at harbor did not fluctuate much. This AM the harbor price is $2.88/ gal. (was around $3.02 a few weeks back) and the pump price is $2.95. My crude calculation is it should be right close to $2.60/ gal.

  13. R Chase — I think “the harbor” is the NYMEX price (http://quotes.ino.com/exchanges/contracts.html?r=NYMEX_RB) which impacts east coast prices. Over the past few years, I have been trying to use the Chicago prices more.

    Interesting that the spread has widened to $1. That sounds like an attempt to increase profits by the stations.

  14. NYH RBOB up ANOTHER 25 cents today.

  15. I played around with gas price charts between Missouri (a non-speedway state) and Indiana; in theory the two states have very similar taxes on gasoline… Our hunch that there has been an effort to increase margins by you-know-who seems to have some credibility. Look at the chart average for last 3 years:


    Note that Indiana was always higher on average (wonder why) but beginning in mid 2011 or maybe fall of 2011 the two started pulling apart a lot more…

    Also interesting to see the effects of state-wide zone pricing. Kentucky has higher taxes than Indiana for gas yet we seem to be paying more in Indiana as of late…


    I travel to/thru KY quite a bit and it seems the prevailing prices there are what the low-zone prices are in Indiana (meaning I did not feel as much of a zone pricing effect in KY than one sees here in IN)

  16. Turbo — nice analysis!

    I’ve been really busy lately, without much time for gas game analysis. We are on the cusp of either a hike, or not. “Not” is because NYMEX prices are falling, which should drag Chicago prices down with it. “Hike” is because Chicago prices aren’t dropping like NYMEX are. Sorry I can’t be more helpful tonight.

  17. Crude down by 4% today… Let’s see if they can resist a reset back to $3.89 tomorrow..

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