Comment on the June 30 prediction: Pretty much CORRECT. Prices rose as predicted, but to $2.99
Wednesday, July 8, 2015, 7:30AM: Recent wholesale/retail price action has been a gift to the cynics. Last week Tuesday, we got a suspicious wholesale hike that led to a price re-set last Wednesday to $2.99, just in time for Independence Day weekend. Then, while the ink on the hike wasn’t even dry, wholesale prices started falling. Then we get Monday’s big drop in oil prices, which has led to a big drop in wholesale gas prices, but retail prices aren’t in a hurry to head down. So, that brings us here: I estimate the price-to-retailers this morning to be $2.58, and in Lowell, which is usually the price-loss leader, you can buy gas at the moment for $2.72. We are still in the $2.80’s in many places. So, unless we get another whipsaw in the wholesale market, I predict we are going to see prices in the $2.60’s around town in the next two days. You might want to wait to fill up. — Ed A.
Prices are still at $2.90 here in the Whitehall/Montague area this morning. But it is summer, and we’re loaded with tourists. So I guess I’ll either bend over & grab my ankles or drive 15 miles south to save $.15/gallon. Both options are insane.
Some serious whipsaw action with WTI Crude today. 30 minutes ago it was up about 30 cents a barrel and with the snap of a finger it’s now down 70 cents. Hope to see a week with falling prices and none of those surprise spikes
I wonder if the China market crash has anything to do with the whipsaw movement today.
Oil inventory report looked generally positive today I thought. And we’re past July 4th now which is usually peak driving time in the Midwest with all the refineries purring along, inventory stable and no hurricanes on the near horizon. Remaining cautiously optimistic as long as the refineries don’t start flooding or something else stupid like that…
In response to Turbo from the previous post:
I have a theory, and I’ve posted about it before, about why our gasoline cycles the way it does. As usual, the spike happens. From there, it’s a race to the bottom. Speedway will mostly follow, not out of greed, but because if they did lead down they would garner a lot of attention from people thinking they are trying to use their unique position to put the competition out of business. When the price of gas reaches break even, that’s when Speedway will raise prices. They will spike up sometimes 10-15 cents over cost after some stations may have been 10-15 cents below cost. But they leave in that margin of error because the average never gets there (at least the GasBuddy average never does) and it will start to fall immediately after a spike up anyway. The big question then is not why does Speedway spike up like they do, we see it happens mostly when a break even price is met, but why do all the other stations lower prices so quickly?
Although if anybody knew exactly why the gas prices in this area acted the way they do, it would be a miracle.
Spot prices over the past few days have been inching up and gas stations have been inching down. Looks like gas stations are now selling at a break even point. Spike soon?
Retail to spot spread in Ohio is now at 65 cents. Don’t see how we can make it past Monday without a spike.
Just filled up for $2.54 in Fort Wayne. I don’t feel lucky waiting another day.
Filled up for $2.61 in Indy. Unfortunately not near the cheap gas on west and south sides but figure if doesn’t go up tomorrow and makes he weekend (not confident on that) I can always top off Monday morning…
Family Express leading a spike to 2.99 in Lake and Porter counties and 2.79 in La Porte County.
Crap, we never went down that much around Kazoo form the last hike. If they hit us this time, we will probably break the $3.00 barrier.
While you folks in Michigan are still at a spike line deviation of 17+ cents, Indy has crept into negative territory as of July 9. Looks like you can hold out for prices to drop more while we are in line for another spike.
$2.899 spike underway in Ohio.
Even though I knew it was going to happen(though we MIGHT have been ok until Monday), I am kind of curious as to why Ohio spiked, when we were still 7 cents over the spike line(2.62 vs 2.55). To see a spike, on a Saturday that averages out at 28 cents/gallon, when we were ABOVE the spike line, is definitely noteworthy.
So, now Ohio is THIRTY-FIVE cents over the spike line, when you take the spike price of $2.899……
Spike resistance in Ohio? As of midnight Cleveland avg 2.707, Akron avg $2.734, Toledo avg $2.736 & Columbus avg $2.776. All have virtually stopped their upward mobility pricewise. Some of their stations seemed to have raised their price to $2.79 instead of the $2.9 GREEDway memo price.
But, of course with Cincinnati (2.860 avg) and Dayton ($2.843) GREEDway was able to herd the sheep without much of a problem.
Ohio average $2.757, Cincinnati avg $2.860 or +$0.10. And some wonder why there are so many cynics here.
Saw a surprise reset this weekend in Northern Kentucky. Up to $2.99 with zero reason as to the cause. Very perplexing. Hoping the drop in oil translates into a drop in spot price soon…
Weekend wholesale prices in Chicagoland (and maybe elsewhere in the Great Lakes) turned out to be significantly lower than what Friday’s 4 cent spot price rise in Chicago RBOB would have predicted (wholesale FELL 4 cents. In that light Speedway’s Saturday hike in Chicagoland really was nothing but greed. As Bearcat500 has seen in Ohio, even here the market response to Speedway has been very muted.
Cincy average now at $2.87. Essentially ZERO resistance to a completely unnecessary spike.
This is known as margin improvement.
TimmP..
This hike was at Chicago wholesale plus 93 cents. I’ve seen that once or twice before, but then they retreat to anywhere from 78 to 88 cents over wholesale with their hikes. Hopefully this is not a permanent change of strategy.
Their margins should improve anyhow after a 9 cent drop in spot prices today.
Spot at 1.87, Cincy average at 2.86. Seems about right(NOT).
http://money.cnn.com/2015/07/14/investing/crude-oil-prices-iran-deal/index.html
This count get interesting. I see this going like this:
-New oil to the market, prices fall.
-News article states how supply could be disrupted if Iran doesn’t follow deal guidelines.
-Speculators freak out, oil prices spike two-fold due to a “reduction” of oil in the market, to pre-deal levels.
Or….
-OPEC just cuts the same production that Iran introduces to the market.
-Speculators freak out, due to OPEC cutting production, prices spike.
Either way, same amount of oil, yet the speculators make out rich by twisting stories around.
I have observed the last several (5 years or so) that the local Pilot, sells Diesel to truckers at about 20 cents over gasoline. The last month, Diesel has been about the same as gasoline, maybe a couple cents cheaper. Meaning that it looks to me like we are due for a 20 cent drop? Or a 20 cent margin enhancement?
Diesel in some areas is equal to UNL at the moment.
Cincy average now $1.06 over spot. I would love to hear the “supply and demand”-ers try and explain the legitimacy of Saturday’s spike.
Last spike here in South Bend, IN was July 1 to $2.89. You can fill up from $2.51-$2.71 here today, avg being $2.59.
Cincinnati is still 10+ cents over the Ohio average. Right now our average should be under $2.50 instead of the $2.81 that it is. There is absolutely no justification for Saturday’s spike, period.