July 17, 2021, 4PM: Well, time to get back to playing the Gas Game, after some vacationing and other down time. On Thursday, in west Michigan we saw prices jump to $3.29, the highest it has been since summer 2014, according to my records and this nice chart from the New York Times. Back in 2014, after years of prices vibrating around $4 a gallon, prices fell by 50% in the second half of that year — with gas following oil prices lower. Among the factors for that plunge was hording, or as Vox wrote, “A lot of unused oil was simply being stockpiled away for later.”
In other words, the supply was being manipulated back then. Now, in 2021, it appears the issue is increasing demand, as the economy continues to recover from the hit it took by the pandemic. Also of note is that this is the first hike in a while where the retail price fell briefly below the 0-cent margin price that I calculate, and then jumped to 20 cents above it, which is classic Gas Game action. Perhaps a post-merger Big Red wants to play again.
This coming week, keep an eye on oil prices, which closed near $72 a barrel on Friday. If they go up, gas prices will too. -EA
Maybe not. NYMEX futures down 15c at this time due to tentative OPEC production increase agreement.
$3.29 NW Indiana reset led by Family Express. That was a short lived break.