Sunday, October 10, 2021, 3PM: What a hike this past Wednesday, to $3.39 in Michigan, following up similar hikes in other Midwestern states. According to my records, the last time retail gas prices were this high were October 2014 — seven years ago! What is going on? Gas prices are rising sharply because oil prices are — just 10% in the past few weeks, to about $80 a barrel on Friday. And other energy commodities are also on the rise. Coal, for instance, is parabolic since May, and natural gas in Europe went up 60% over two days last week. My reading of the situation is that we are seeing the flip side of what happened in April 2020, when oil future prices were briefly negative. Then, too many traders at the beginning of the pandemic were holding on to paper representing oil, and they sold into futures expiration. This time, too many traders are short and need to desperately buy energy products to balance their accounts.
What does that mean for you and me? I expect more volatility in gas prices — maybe another jump, but also the chance that prices skid once the traders get their anxiety out of their system. Hard to make predictions in this climate. -EA
$2.399 Indy area Speedway hike
$3.399, sorry
First time in a while where I saw NW and the rest of Indiana jump up to the same price….3.39.