Comment on the October prediction: Completely WRONG in Michigan, but there was a hike to $3.29 in Indiana.
Monday, October 13, 2014, 1:30PM: With gas selling for $2.60 a gallon in Lowell today, what is going on here? Mathematics seems to be breaking down, as I am calculating that retailers are buying gas right now for about $3.00 a gallon, and selling it at a loss. I can’t explain it, but at this time six years ago, prices went from $4.19 on September 13 to $1.59 on November 26 without a hike, and that’s when the Great Recession started. I’m not saying the economy has started falling apart, but something spooky is going on. Enjoy buying gas “on sale” while you can! — Ed A.
I wasn’t recording back when the big fall happened, but it got me interested in keeping track of things. It isn’t hard to believe prices falling like they are. It’s the time of year to do so. There is also so much oil in the system right now, however, that prices are falling even further because of it. Low prices are a good thing, right? Well, since a lot of that oil is a lot more expensive to produce, that production may disappear with lower prices, making less oil in the pipeline, making prices higher… well, you get the idea.
The days of <$1 gas is over, maybe even <$2. Enjoy the prices while they last, they may never get this low again.
Man, I sure am not seeing it in Fort Wayne, lowest is SAMS at $3.02. Average is $3.22. I’m just not feeling the glow yet.
Just found this article on Yahoo Finance in re: oil prices
http://finance.yahoo.com/news/exclusive-privately-saudis-tell-oil-095520702.html
TimmP, just got back from a trip to Georgia over to Arkansas and back from Michigan and your area is the highest price I saw. Georgia was close, but once you get north of Highway 24 in Indiana, the prices are the highest I saw. Sorry. Usually the Kalamazoo area has some of the highest prices too, but was are below 3.00 in most places.
Zone D-Fence!!! Zone D-Fence!!!
Prices are always going to fluctuate along with the economy. The question is whether you prefer a.) a robust economy with high gas prices, or b.) a struggling economy with low gas prices. (Anything else is unrealistic, so it’s not a valid choice.)
Personally, I’ll take A and reluctantly accept $3.50-$4.00 gas.
Bp and shell up ro $2.99 in Lowell, MI and Meijer is 2.89, admiral and speedway holding out at 2.60/gal yet.
In the USA consumers are driving the economy. $4 gas is not very welcome by those who watch their pennies. Regardless of the economy. After all, we had a “robust economy” in 2007 and one could argue that it was $4.20+ gas, not derivatives and bad loans, that crashed the party.
It’s all about disposable income. True high end customers don’t worry about gas prices. I live among them. But the stuff I help design is sold to consumers and if they aren’t buying because there’s no disposable income you can guess what happens.
When the pie is growing larger and the benefits of a growing economy are distributed reasonably then prices can go up but wages do too.
Gas impacts prices of other things. Or is conveniently blamed for their hikes. Last time I remember beef it cost $3.50 for a decent cut. Guess where it is now? Corn goes for ethanol and so much for low prices.
I seem to remember a robust economy in the late 90s, and gas was WELL below $1.50.
Now, since the CFMA of 2000 was passed, it’s true, you can’t have a robust economy and low gas prices. That thing needs to be repealed.
I’ve always thought high gas prices are a hindrance to a recovering economy. When gas prices approach $4.00/gal consumers start circling the wagons. I’ve seen a decrease in traffic in the somewhat busy connector road that I live. I would imagine an $.80-$1.00 drop in gasoline prices helps with putting butts in the seats at your local restaurants and puts cars in the lots at the brick & mortar retailers. There is just more money in the consumers’s pockets.
Another benefit; it will be interesting to see if winter heating costs will be pleasantly affected soon.
Some see $3.50-$4.00 has bringing on a more robust economy. I tend to disagree. 1980 and again in 2008, although other factors were involved, higher has prices has been a drag on the economy in those particular times.
Here’s an interesting list.
The 25 lowest average prices for US Metro areas
As of 10/14/14 8:48AM
St. Louis 2.835 Prices Falling
.
Tulsa 2.856 Prices Falling
.
Kansas City 2.869 Prices Falling
.
Chattanooga 2.879 Prices Falling
.
Richmond 2.892 Prices Falling
.
Greenville 2.907 Prices Falling
.
Spartanburg 2.910 Prices Falling
.
Grand Rapids 2.918 Prices Falling
.
Santa Fe 2.919 Prices Falling
.
Oklahoma City 2.925 Prices Falling
.
Toledo 2.925 Prices Falling
.
Myrtle Beach 2.930 Prices Falling
.
Jackson 2.943 Prices Falling
.
Sioux Falls 2.944 Prices Falling
.
Amarillo 2.947 Prices Falling
.
Albuquerque 2.948 Prices Falling
.
Memphis 2.949 Prices Falling
.
Dayton 2.954 Prices Falling
.
Lubbock 2.955 Prices Falling
.
Wichita 2.956 Prices Falling
.
Quad Cities 2.961 Prices Falling
.
Roanoke 2.961 Prices Falling
.
Topeka 2.963 Prices Falling
.
Twin Cities 2.972 Prices Falling
.
Kalamazoo 2.972 Prices Falling
That only helps prove the disconnect between the thought processes of Big Oil (and their cheerleaders, voluntary or funded) and reality.
I had some interesting discussions on the old IndyStar message board about this topic. So someone popped the question, why not invest in oil companies and ‘make up the difference’. I did the math and found out that to make up the difference in gasoline price alone, say 200/month, all I had to do is invest maybe $20k in oil stocks. Their appreciation and dividends could conceivably ‘pay back’ the cost of increased fuel.
Alas, that’s not the case. Due to multiplier effects and consumer attitudes, price hikes in gasoline ripple faster than a Speedway Thursday hike. We started seeing enormous price increases in other things remotely unrelated to gasoline. Basically the powers that be figured out that once the stock market goes up, it’s a free for all to raise prices (my unscientific example being flavored coffee creamer).
The public seems to have settled on $3 being the new $1 so as long as we stay there we should be good. However, the multiple whammy of volatility, spikes, zone pricing, and ‘shortages’ help push the price past 3.50 or even 4.00 (not to mention taxes) and this makes the public quite nervous.
As I mentioned, it’s a zero sum game since the working people only get a sliver of real productivity and economic gains. Which, in retrospect, may be good. Who wants $10 minimum wage and $5 gasoline?
My cost today is 3.06. Retail is at 3.19. I’m not playing the game, but I’m also not selling much of anything.
Jen: Fort Wayne, $3.20 (Not a huge town, but not small, either)
Looks like mid Michigan is currently spiking to 3.25 if Gasbuddy is correct.
So much for fallng prices. Ohio is spiking to $3.19.
3.199 in sw Ohio. Topped off for 2.85 this morning….
Oil dropped $3.46 today. Gasoline fell $.063 also. As reported on http://oilprice.com I read their page every day. Good information. Lottsa oil out there and lottsa stories covering the enrgy sector.
Mid-Valley pipeline sprung a leak yesterday. It carries oil from Texas up to Ohio and Michigan. If any of the refineries along the way (Husky Lima, BP Toledo, PBF Toledo – although they’re down for maintenance, Marathon Detroit, Marathon Catlettsburg) were counting on deliveries, this might spike prices.
One of our Cincinnati consumer reporters was even harder on GREEDway than I was. At $3.19 you have to wonder especially with Chicago Spot down another nickel.
http://www.wcpo.com/news/uh-oh-speedway-raising-gas-prices-back-to-319
I love how short sighted that reporter is. Not counting today, spot price in Chicago fell 23.35 cents since 9/25 (2.6288-2.3953), while the average fell 30.6 cents (3.34-3.034).
Yeah, the spot fell 5 cents today, and Speedway went up to $3.19. But they were correcting a trend that was causing the price you pay at the pump to be lower than the price they paid to pump it before they knew the spot would fall 5 cents.
It’s not rocket science. But it does take a little attention to detail.
Spent a couple of days in South Haven, Michigan for apple picking and before heading back to Indiana this morning, I filled up for $2.87. My wife took a picture of the electronic sign board saying “it looked funny with a 2 as the first digit.” Most stations there are now $3.25. I hope Ohio and Michigan decide to go it alone on this spike lol
Wow, a reporter that finally calls out Greedway instead of making up excuses for their greed. Wish more reporters would expose them for what they are. Greed is going to destroy this country.
Entered prices on GB this morning. Put in 3.49 for premium. It asked if I meant 2.49, “that seems too high”.
Ha!!
Mike, if anything is going to destroy this country, it’s going after legal profit-seeking that is mistaken for “greed.” What’s happening in energy today is little different from what happened while the country was developing into a superpower.
Greed is still the most overused and misused buzzword of the decade. It’s virtually lost all meaning by now.
Yet Speedway most often raises their prices first and lowers their prices the least. Where is the line drawn between greed and “legal profit making”? Or can we simply call it legal greed!
Greed, if it applies at all, likely applies when costs are falling and dealers are reluctant to lower prices. During the price collapse in late 2008, in my market (Chicagoland) costs were falling so fast that for an extended period some dealers were making over 50 cents a gallon and for short periods, some were making over $1.00 a gallon. Speedway’s price hikes are all aimed at about the same target price over wholesale (gross profit margin) the day they go up (and it’s not as much as 50 cents a gallon). And they are all triggered by the average margin at their stations in a market reaching a certain minimum amount they are not except in rare cases, arbitrary. I do recall one or two hikes that seemed way over the usual margin in a couple Ohio markets early on this summer. Never figure that out (back to greed I guess)
Robert, we can look at that scenario another way. Speedway, being wholly owned and operated centrally has a unique situation. They have the power to put other stations out of business if they decided to start pricing aggressively. Instead, they do the opposite. They increase prices when they see the profit margin drop to near zero, and they don’t drop their price unless the other stations do.
That is one of several scenarios. But we will never know exactly why they price the way they do, unless someone from the inside tells us.
And exactly how did Speedway get to this “leadership position”??? Maybe by acquisitions such as Gas America and Hess and many more…
I see a lot more independent retailers and small chains go under or in the six state area, all while Speedway is renovating or building Taj Mahal stores…
In Indiana, Speedway got hold of all the Bi-Lo’s, all the Bonded, all the Checker, and a few other smaller chains. Speedway and Checker has already done the rockets and feather thing for a long long time at that point, although it was with 10¢ and not 30¢ at the time. So, they may have taken a process already in play and brought it to perfection. What I know, is that coming from a state that did not have these spikes into one that did, the process really helped to obfuscate the actual price you were paying, unless you could somehow always make your purchase at the lowest prices.
Bonded used to be the go-to place if you if you wanted to pay a few cents cheaper than Sohio or Shell. United Oil was also an up an coming group of gas stations in Indiana. We had several Super America gas stations in the Cincinnati Tri-State area including one directly accross the street from Speedway near our West Side Cincinnati suburb.
Bonded, United Oil and Super America have been all gobbled up by Marathon/Speedway. The Super America by us closed up as soon as the deal went down and sat empty for years until it was leveled and a tire store built there.
It seems like stations worry about the price they will pay to refill the taks while the cost is climbing, and worry about the price they paid when they filled it while the cost is declining. I worked retail for 20 years and it was the same wether lumber, paint, microwaves, or tent stakes. I believe in Fort Wayne, I am seeing the second example in full display, and that is why the average is still stuck so [excessively it feels] far over $3.00 ($3.18 as of this writing) when the calculated cost is a full 36 cents lower.
Daleville Indiana is also stuck it seems. I think Chicago Spot will have to drop below $2.00 for the pump prices to finally drop below $3. It’s been 2 1/2 years since I’ve seen gas under $3 here. If it’s any consolation Timm, nearby Muncie and Anderson are right there with Fort Wayne
TimmP my cost today was 2.92. I’m in West Michigan.
Just curious…….Chain stations, like Speedway, Rickers, Circle K, etc.; are they subject to zone pricing as they have their own trucks for delivery? If they are not, and do get the best pricing available, independants really do not stand a snowball’s chance. Since Fort Wayne has one of the highest ratios of Speedway to other stations, that could explaiin the reluctance of the local market to fall like it is other places. Curently, there are NO stations under $3, SAMs at $3.06 is the lowest. We have no low price leaders like Admiral, and the only Pilot is back on a little traveled road except by Interstate truckers using the truck stop.
In New York crude and the spot gasoline rebounded today. Hope Chicago doesn’t follow suit.
Let’s see, Crude and spot fell rapidly and GREEDway spiked. If we get a couple of these days back to back will GREEDway double down on Saturday? I think I will top off tomorrow in case GREEDway goes Squirrel-palooza on us.
Spot price ping pong…down more than 11 cents yesterday and up nearly 9 today.
Crude almost always goes up on Fridays, so I’m predicting Spot will go up a nickle or so tomorrow and Greedway will reward us with a Saturday spike. Please tell me I’m wrong!
Not unless spot goes up at least 15-20 cents tomorrow, per Ed’s numbers (and probably more like 20 or more cents, because the Saturday spikes are usually reserved for when the profits margins are negative (as opposed to during the week, when sometimes a +$.04-.05 margin is enough for a spike)).
We’re at an 81 cent spread in Ohio right now. I doubt we’ll see any spikes over the weekend. If the spread drops below 65-70 over the weekend, we MAY see one Tuesday. With the negative press Speedway’s been getting this week, they may be a (very) little more hesitant to spike.
Spike in La Porte County to a price of 3.099 (from 2.84-2.88 range). Spike is led by Family Express (the station that usually goes up first in our area).
Ed – For what it’s worth, I just noticed recently that GasBuddy is locking in it’s “daily average” at around 3:00 am ET. If you take what used to be the “now” price on the front page of any local/state site, then you’re really using the price from about 3 am that day. This becomes important in calculating the Spike Line, especially in a falling price market. Yesterday, the OH price was locked in at 3.062, but was realistically about 3.04 by last night. That puts us a couple cents closer to the Spike range in OH (although I suspect it’s true in MI and IN, as well). I have found that you can still get a “Live Ticking Average” as they call it on the Media tab of the sites. You can then select any market through the map or drop-down menus.
Well color me shocked! Gas in Daleville Indiana (Central Indiana) has gone below $3 bucks a gallon. First time in four years. I’ll take it! For once I’m happy with gas prices.
Thinking that gas would go back up on Saturday, I gassed up my two cars and the mower cans Saturday morning. I did get it for under $3.00, JUST! I’m sort of happy.
Speedway laying low in South Bend so far. They must have talked Phillips into spiking to $3.09 today.
Our little area of Cincinnati dropped about 10 cents since Sunday evening which is good but it gives me the uneasy feeling GREEDway will be ready to pounce on Thursday.
Well the $2.89 gas was good while it lasted….Greedways in Muncie-Anderson cranking up to $3.19. With Christmas just a couple months off, the Greedway execs are fattening up their bank accounts for a French Riveria holiday getaway it seems
Going back up to $3.19 in Grand Rapids also.
Now Speedway is spiking to $3.19 in South Bend
$3.199 in Indy too.
Our market average had dipped below $3 yesterday. This is a typical correction of about 20 cents.