The Shadow of Glencore

Comment on my September 14 prediction:  Seeing how we saw hikes across the board on Wednesday, September 16, the prediction was WRONG.

Tuesday, September 29, 2015, 9:15PM:  I’ve been reading a bit this week about Glencore, a giant commodities trading firm that has been falling apart this summer.  This company is an example of the kind of speculators that play havoc with the oil and other markets, and there is some evidence that the collapse in oil prices (and lately some stock markets) may be connected to some of their failed trades.  That Glencore is starting to percolate in the media (my favorite quip is “You can’t spell Glencore without Enron“), I am starting to wonder if this is the beginning of the end of the bear market in oil.  In fact, oil prices hit their low of the year on August 24 and have been slowly rising since.  Gas prices started turning around on September 16, and now there are hints of another price hike in the works.  Estimating a price-to-retailers of $2.37 a gallon, and with prices as low as $2.31 in the Grand Rapids area, I smell a hike coming on Wednesday or Thursday.  $2.59 a gallon?

Updated: September 29, 2015 — 9:26 pm


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  1. And there it goes… Speedway is resetting to $2.49 in Indy/majority of Indiana this morning and $2.59 in Michigan. Get it while you can!

  2. 2.499 in Ohio as well.

  3. Still a lot of 1.8x’s in Myrtle Beach. Those Gulf coast refineries need to teach our refineries how to keep those squirrels at bay.

  4. Good news is, decent gasoline and oil build in EIA report this week. Bad news is, Midwest refinery utilization is down to 87% from 92% (and 98% two weeks ago). That’s lower than the west coast refineries now. Let’s hope refinery maintenance season ends soon. Ugh.

  5. I’m sure utilization will go back up just as soon as oil prices start rising again. Bottom line is, when you control everything, you can either make your profits at the beginning or the end of the process. And once again, we have to bend over and take it.

  6. South Bend IN is heading to $2.49, just across the line, Niles MI is $2.59.
    I filled up for $2.29 this morning.

  7. Muncie spiking to $2.49 as well. Lemme guess…Speedway owns Glencore

  8. 2.59 Kazoo area now

  9. The cynics among us can’t help but wonder what would happen if gasoline prices were “regulated” the way electricity or natural gas is. I don’t recall Vectren or Duke pulling antics like those – if nothing else it was energy traders like Enron that did said antics…

    Regulation is not the answer obviously but some oversight is not unreasonable – if the government is too busy looking at Net Neutrality then they may have a regulator or two free to look at gasoline…

  10. Actually, Duke has done this exact thing. Back in 2008, a hurricane (minus the rain) moved through the Ohio valley, causing a TON of damage. People were without power for a week. Duke got PUCO to agree to let them raise rates, and I quote, “to pay for damage caused by the hurricane”.
    The energy companies are in bed with the agencies that are supposed to regulate them.

  11. I would hate to be Glencore’s auditor! Trying to price and adjust all that “inventory” to today’s market prices, and then take a charge on the books, would be a real headache!
    If their inventory were heavily hedged, I would be worried on the hedge backers, and their balance sheets….A whole stack of cards could come down, with collapse possible….

  12. Turbo46032 this proves you’ve been right all along! Squirrels: America’s tiny menace!

    Squirrels may look unassuming, but these little critters have been known to cause big trouble. In fact, in the past few years, they’ve disrupted businesses, sporting events and taken down other creatures you’d never believe they could.

  13. How many other companies out there like Glencore? Price Futures Group, Goldman-Sachs, Summit…etc.

  14. I remember the good old days of January 2015. Crude about right where it is now, spot around $1.15 and gas at $1.70

  15. California is experiencing similar issues we experience with refinery issues. A watchdog group has been investigating this and asking a lot of question.

  16. I filled up yesterday morning for 2.19 and last night when I drove by the price had jumped to 2.59. There’s a Speedway on one corner and a Kroger station on the other so as soon as Speedway goes up or down Kroger follows.

  17. Same here in Kazoo Victoria. Greedway goes up then everyone else does, right to the penny. The only ones that don’t are Costco’s and Sam’s. I travel a lot thru the south and southeast, and as far as I can tell, we are the only area (Upper Midwest) that jumps the way we do. Others my go up 3 – 5 cents and stay there but I have never seen them jump 40 cents in a day.

  18. I agree, Mike!

    Who knew? Dunkin’ Donuts announces closure of 100 stores! The company did not provide a list of what stores would be closed, but said that they were all owned by the Speedway gas station and convenience store chain.

  19. Cincinnati at $2.476 is now 19 cents over the national average. But this just couldn’t be true. We changed over to the ‘cheaper’ Winter blend of gas, didn’t we.

  20. Chirs wrote: “Lemme guess…Speedway owns Glencore”

    No, but Speedway apparently owns the Checker trademark, as in Checker taxi cabs:

    “As for securing the Checker name, that proved easier said than done, Contarino explained. Following the bankruptcy of the old Checker Motors, which had ceased vehicle production in 1982, but remained in business for 27 years stamping sheetmetal for other automakers, Contarino discovered that the company no longer owned the Checker trademark. Instead, Speedway—the convenience store and gas station chain—had somehow obtained it. He then struck a deal with Speedway in which the chain could continue to use the name for gasoline and he could use the name for automobiles.”



    Victoria wrote: “Dunkin’ Donuts announces closure of 100 stores! The company did not provide a list of what stores would be closed, but said that they were all owned by the Speedway gas station and convenience store chain.”

    That’s interesting, because one is being built next to the Speedway in Texas Township (suburban Kalamazoo, Michigan):

  21. Interesting read Diether.

    Score one for the little guys! Speedway in Daleville Indiana was the first out of the gates to go to $2.49 (imagine that lol). The two nearby Pilots held steady at $2.25 as they usually take at least 8-10 hours after Speedway to go up. Surprisingly, yesterday evening the Pilots were still holding $2.25, but even more to my surprise as I drove by just a short bit ago, Speedway lowered her back down to $2.25 to match the two Pilot stations who held their ground.

    The Muncie stations that shot up to $2.49 are already drifting downwards. I love saying these two words….FAILED SPIKE!!

  22. Showed up in my news feed about Speedway and Checker. Not sure why they bought the trade mark.

  23. If Speedway would partner up with Long’s Bakery of indianapolis…

  24. Diether Haenicke: It looks like Speedway is getting kicked to the curb. Back in 2012,Sack of Donuts LLC made a multi store development agreement with the Dunkin’ Brands Group conglomerate that will eventually result in doughnut shop locations around Grand Rapids, Kalamazoo, Muskegon and Battle Creek.

  25. Over the weekend we went up to Atlanta, MI – gas prices ranged from the mid $2.40’s to mid $2.50’s with the exception of just south of Grayling – we filled up for $2.12 a gallon.

  26. Looks like spot’s up big today. Another spike looming?

  27. Sam, I noticed the gas war around Houghton Lake last week also. It appears to be over now.
    Chris, we’re down in the upper 2.30’s on the south side of GR,I was thinking the same thing.

  28. Those squirrels have been busy since the switch to Winter blend.

  29. You know it had to go up. A nominal decrease was predicted.

  30. Some of our gas stations in Cincinnati don’t even come down in price any more before the next GREEDway spike hits. Our GREEDway on Monfort Heights still at the $2.49 memo price and the minion stations around it (except Sam’s) haven’t budged either.

    The Summer driving season is over, they said. Winter blend gasoline is cheaper, they said. Gas will be $2.00/gal before long, they said. I’m thinking $2.59 GREEDway spike today.

  31. Looks like my assertion of always expect the OPPOSITE of what the “experts” (those that get paid, and get air time, to make their predictions) tell you, is being proven right, again and again.

  32. Well get ready, we got the kiss of death last night. Fox17 in Grand Rapids did a piece talking about how our prices are higher than other parts of the country… don’t worry the experts say…they are about to go down and should go down fairly quickly… Guess I better fill up today..

  33. And meanwhile, in South Carolina, the average price is STILL $1.95. STILL….
    Any one want to take bets that their prices DON’T shoot up like ours do, every time a fart is heard at a refinery?

  34. ChrisDG74, or a hurricane?

  35. See oil is on the rise again, talk of cutting production or something I guess. Thanks Greedway for making sure the Upper Midwest doesn’t get to enjoy the lower gas prices like most of the rest of the country. Look up the meaning of the word greed and you would see a big red “S”

  36. I wouldn’t blame Speedway, I’d blame the Chicago Spot. It’s 35 cents higher than the NYMEX right now. Speedway’s got to follow the market. I wouldn’t expect them to sell at a 35 cent loss just because we want cheaper prices.

  37. I blame both, to different degrees, depending on the situation. Right now, yes, whomever is bidding up spot prices and/or letting the squirrels run wild at the refineries gets the blame.
    I don’t expect them to sell at a loss either, but they sure as heck don’t ever waste an opportunity to spike, either.

  38. Bill Eby…
    Normally this time of year CBOB should be approaching parity with the NYMEX!

    Speedway now operates at least 38 stations in South Carolina.

  39. 38? Not even a drop in the bucket. I have that many within a 10 mile radius of my house, according to their site.

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