Comment on the December 17, 2014 prediction: No hike the last two weeks of December, so the prediction was WRONG.
Thursday, January 1, 2015, 1:30PM: Happy New Year to all our readers! I appreciate that you come to read about gas prices, and I hope we can continue to help you save money during 2015. Wow, on November 24, retail gas prices were $2.99 in Standale. Today, it is $1.84, and $1.68 in Lowell. Reports are that we have some of the cheapest gas in all of the U.S. It has been remarkable. What can we expect going forward? I have to bow to history and expect to see prices move up over the next few months, as they usually do during the winter. And we are due for a price hike, because drops in retail prices are finally catching up with drops in wholesale prices. If the pre-price crash rules hold, we’ll see a jump soon to about $2.09 a gallon. Friday? — Ed A.
No sign of a spike in the Indy area … yet.
Drudge had a story about gas dropping for 99 days in a row. As I was looking at a Gas Buddy graph, I saw about Sept 7th for Indiana was the date the drop started for us. The USA average actually started its daily climb with no increases the whole final 6 months of 2014. Then I noticed that California was the source for the article. And California has actually been dropping right along with the average USA price. They didn’t have to wait till Sept 7th like the rest of us did. To be fair, Indiana did get a bit of a small drop between 7/2 and 8/15, then climbed till Sept 7th and started the march down. And on 12/2, dropped below and stayed below the USA average.
http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=0.30&year1=1972&year2=2014
Gas at 1.69 or so in Holland/Grand Haven area.
Not bad eh?
Looking at the EIA article posted on the Gass Buddy website this morning, gasoline inventories increased 3.0 million barrels for the week. 2.6 million barrels of the increase is in the Midwest region. I’m hoping we are safe for another few days.
A few stations in the Sharonville area North of Cincinnati are at $1.72.
Can’t help but wonder if sales inside the (often newly renovated or rebuilt) Speedways are picking up courtesy of low prices. Today I filled my Honda Fit for $17.50 at $1.85/g … Could have been less but I was too lazy to drive to Costco for $1.75/g
Couldn’t talk the wife into stockpiling gasoline in the basement… sigh.
“Friday?”
Why would you predict a Friday for a reset, particularly one the day after a major holiday? You know Speedway rarely resets on Friday through Sunday.
Now Monday (January 5) is an entirely reasonable prediction, with Friday’s Michigan spike line at $1.8799 and the GasBuddy Michigan average currently $1.930. That’s a difference of only 5.01 cents. Unless there are big drops in the market next week, I think it is near certain we will get our first reset of the year no later than Thursday, January 8.
The Kalamazoo average is currently $1.812.
The Grand Rapids average is currently $1.784.
The lowest currently reported prices in Michigan are $1.569 to $1.609 in Flint, Burton, and Genesee and $1.619 in Holland and Zeeland.
People may not even notice a reset next week, because it is predicted to be so cold and windy (highs in the teens, lows in the single digits, and 0 degree wind chills).
$2.099 is a hard amount to reset to. Everyone wants to see that $1 up there, so that price will probably fall to $1.999 within 48 hours at the most competitive locations (some places might not even go above $1.999).
I’m expecting a hike sometime this week too, however I’m guessing 1.999 will be the reset. That will bump Flint and Holland up about 35 cents and the rest of the state 15-20ish. Did anyone happen to notice that some of the Admirals and a few other stations in Grand Haven/Spring Lake area have made some small increases however far from spike worthy. The Murphy station there was 1.66 and then went up around a nickel and is back in line with other stations.
1.999 doesn’t seem high enough. That only puts it 78 cents above spot, and only an 8 cent,average increase in Ohio. Speedway’s recent spikes have been at least 85 cents above spot, if memory serves. I’m betting on $2.099 in Ohio, 88 cents above spot. Filling up tomorrow, just in case.
Since my last post almost 22 hours ago, the Kalamazoo average is UP (on a SUNDAY) two-tenths of a cent to $1.814. GasBuddy shows the “yesterday” price at $1.810, meaning it is currently UP four-tenths of a cent in their listing. GasBuddy lists the Kalamazoo average as STABLE, rather than falling or rising. This is consistent with the small increases Steve noticed. These are sure signs that a reset is imminent, at least in Michigan Speedway dominated communities.
The Michigan average is currently $1.917, 3.71¢ above Friday’s Michigan Spike Line.
At the Shell in downtown Kalamazoo, regular unleaded (E-10) has been at $1.799 for about three days now (a stable price like that is another sign that a reset is imminent). Based on the official U.S. inflation figures, buying gasoline for $1.799 in 2014 is like buying gas for:
* $1.31 in 2000 (That was the first year, from my perspective, that high gas prices became an issue. It was the first time I ever saw gas go above $1.359, outside of the Kuwait invasion in 1990. Gas got as high as $1.999 that year. It was also the year when there was deregulation of some commodities trading, that resulted in there being speculators in the petroleum market who had no interest in physical delivery of the oil.)
* $1.00 in 1990 (During Saddam Hussein’s invasion of Kuwait in August, gas shot up to $1.409)
* 63¢ in 1980 (I think I remember seeing gasoline at $1.119 at one point during that year. In that year, credit rates were so high that I received 5% quarterly interest on my savings account. Today, an equivalent savings account delivers only 0.1% interest.)
* 30¢ in 1970
* 23¢ in 1960
* 18¢ in 1950
$2.55 in Clare and also in the Holland Zeeland area. Thats running in the .26 cents a gallon range in 1971 dollars.
CHECK and MY BAD. Its $1.55 and $1.56 in those areas. I STILL have to do a double take as I type that…!!!
How come no one has commented on how 6 of the 10 cities/towns with the cheapest average prices are in Ohio and Michigan? Even if spot is lower in the Great Lakes region than in other parts of the country, that’s still pretty impressive and something that would be highly unlikely if cyclical pricing didn’t exist.
More downward pressure on oil and RBOB today. That might save us from a spike.
GasBuddy’s lowest state averages:
#3 Michigan – $1.887
#4 Ohio – $1.890
#6 Indiana – $1.912
USA – $2.183
GasBuddy’s lowest local averages:
#1 Flint, Michigan – $1.738
#2 Grand Rapids, Michigan – $1.754
#3 Toledo, Ohio (formerly Michigan) – $1.764
#5 Kalamazoo, Michigan – $1.793
The fact that Michigan is on the top of these rankings is another sign that a reset is imminent, or possibly already underway as I type this.
Speedway is resetting to $2.099 this morning in Michigan.
Speedway was late with the reset today, with the first report coming in at 10:39 a.m. in Holland.
Nothing in sw Ohio (yet).
Will be interesting to see what kind of “legs” this spike has, with everything still dropping.
Family Express leading a price hike in NW Indiana. Spike price is 1.99.
No OH hike yet. MI and IN.
Indianapolis (and usually most of rest of Indiana goes with it) is going to $2.15 at Speedway. How did we get so lucky?
South Bend, IN has a bunch of Speedways @ $2.15 now. Avg was $1.90 before spike with low of $1.75 at Costco.
Happy New Year Speedway!
In grand rapids stations are going up too 2.09, others somewhat less,.. Greedway strikes again,..
spike to 1.99 in progress………
This is an interesting hike. Many Speedways and Meijer stations up to 2.09 in MI, but others not so quick to follow suit. Admirals have held out as have a lot of Marathons and other smaller groups (Wesco, etc). With oil down 4%, do you think the hike will hold or fold?
Bonus points for gratuitous price hike with crude and RBOB falling!!!
Gratuitous?
Turbo, with a single click, you could see the margins as of last night:
$0.0041
$0.0771
$0.0571
That’s pretty damn thin. You can deal with this.
I’m not going to complain. Just I wish we could have dropped enough first that a spike would stay below $2.00. But geeze, after 6 years of the other? I’ll take this.
Yes, RBOB is falling today. But there were days that it went up recently. Did prices spike? No, instead they kept falling. At the time this morning, the margins were just thin enough to initiate a spike. Now since RBOB is falling and we had a spike, hopefully the spike won’t hold up and prices will resume their decline down. What we need is for spot prices to be also down and this should guarantee that the prices will decline.
Great to see such a long time without a spike, especially during two holidays. I don’t agree that prices spike because of a holiday, but I know many others think that. As for my opinion, this spike was justified.
TimmP: Our area was lucky enough to see a spike under $2. 🙂
Guess it’s time to make up for lost ground. Daleville, Indiana with a “super spike” of 41 cents a gallon to $2.15. I expect it to be short lived though. With oil dropping below $50, maybe we can hope Spot drops below a buck!
NYMEX RBOB may have fallen but Chicago based spot prices (which correlate better with price hikes in the Midwest) were up a couple cents. This is the season when the large late fall early winter spot price discount vs NYMEX RBOB, more than 30 cents early last week, ALWAYS erodes steadily. It was down under 19 cents today.
Gratuitous as in, decent RBOB drop, decent crude drop, therefore spike! Gratuitous as in, if the retail price did not have a spiking component built into it, we would not have gone to 1.75, but we would not be spiking 41 cents either. It’s the same old song.
Can’t complain in either case, filled up three cars for 1.75 to 1.85. Nothing like filling up the good ole’ turbo Wagon for under 30$. Driving the Fit month long I can keep our gasoline costs to $100/month at those prices.
Well… Almost uniform reset to 2.09 across mid MI. regardless of prior price per gallon. between 1.68 average and a low of 1.55 at 1-stop in Flint. That makes 54 cents worth of spike for that station (and a new record locally) 2 years ago, regional spike / price resets were in the 33-35 cent range. (And still radical compared to markets in virtually any other zone in the lower 48.) So how does a reset to a virtually identical price, regardless of prior varied prices at many differently owned and supplied stations not seen fishy? (Yes, we’re all aware that gas prices are much more affordable than the last few years. Yes. its a good thing even if temporary.) But the existing spike mechanism is still a shenanigan generator.
Why did gas go up .26 yesterday in northern Indiana?
GREEDway is resetting the price in Ohio to $2.099.
Costco in Kalamazoo already back down to 1.859 today from jump to 209.9 yesterday, so don’t look like Greedway’s price reset is holding..
Fort Wayne has a very tight “stick together” mentality. Very very few few stations fall quickly. That being said, even the stations that are quite stubborn are at $2.11 right now. Down 4¢ in one day.
Stations in sw Ohio couldn’t join the spike fast enough. Average is already at $2.04.
As a side, I entered prices this morning at gasbuddy. Got the “2.39 seems high. Did you mean $1.39?” message.
Isnt it gas gouging when the price of a barrel of oil drops and the cost of a gallon of gas goes up. How much of our money does it take to satisfy companies who are making billions of dollars and yet still get tax subsdidies. Ive contacted local news agencies who will not even run the story. Contacted the Attorney Generals office who says its not their jurisdiction. This is got to stop. Tried PBS and hope they will run something (dont know if oil money owns them also). I personally am not going to stop trying. Washington has this country so divided that they count on us not being able to pull together. Is it true – do a few rich people win over the rest of us. Lets hope not.
Please say that was parody or satire. Please.
Vince.
If you’re in Michigan, the AG has a whole web site about gas prices, including at the end an implied definition of gouging. I don’t see any mention of oil prices fall and gas prices rise being gouging.
If you’re in Indiana you can use this form to report gouging.
By the way oil went up today but gas in most places in the midwest is now starting to go down. What do you make of that?
Indiana gouge report form
http://www.in.gov/attorneygeneral/2431.htm
In Indiana, the cost of oil could be $0.00, and the taxes and delivery would still be 65¢ or more, ¼ of the selling price right now. So we are now at a point where the price to refine the oil into gasoline plus the price with taxes is a very significant portion. Further drops in the price of oil will yield very little in price at the pump after you hit $1.50
But I still wonder about 30¢ and larger price resets when at $4 it was 7.5% and at $2 it is 15% of the sale price. But we seem to be working all along in CENTS of markup, not PERCENTS of markup.
TimmP…
Of course your last comment is dead on. Dealers are only interested in profit margin, not what the actual price is. Do you expect them to willingly lose 50% of their profit when the price drops by 50%? And by the same token, if you accept that they have the same profit margin goal, the wide swings wouldn’t get any less.
However, Speedway has dramatically increased their target profit margin when they hike prices. I have a thread on Chicagogasprices.com that goes back to early 2009. At that time wholesale was just about what it was now. Back then Speedway’s price hikes typically came in at a price 63 cents over readily available Chicago wholesale. The last one, Monday was 93 cents over the same wholesale. No tax increases in that time, so most of that extra money goes into Speedway, and others’ pockets.
This latest spike raised the Indy average by 28 cents — somewhat larger than spikes that occurred during the recent downturn.
The market average has resumed its downward motion, for now.
Jim….
I can only think of one reason why they (Speedway) has had to spike sooner. I think too many of us have use Gas Buddy and this site to only fill up when the price is down. Tooooooo many of us makes the practice of almost hitting cost just too hard to absorb.
That’s the whole point. I don’t begrudge Speedway for wanting to make money – but this isn’t 1998 or even 2005. Now everyone has a smartphone and it’s trivial to monitor price spikes. They’re making up some of the slack with improving store looks and offerings (a good idea) and zone pricing (not so good idea – not unlike spikes).
It could well be it’s all in an attempt to not raise average price and keep it steady which would allow the competition to more easily undercut them. That’s about the most plausible explanation my room temperature IQ can think of.
The first digit of “2” I saw three days ago, now says “1” once again. $1.99 and falling…just the way I like it!