Brave Prediction: Prices Will Be Volatile

Comment on the June 19 predictions: Prices fell slowly throughout west Michigan, with more stations under $5 each day, although not much. The prediction was basically CORRECT.

Tuesday, June 28, 2022, 7PM: It’s time for another episode of “Will they hike prices in front of a holiday?” That it always happens is more myth than reality, so let’s go to the spreadsheet.

We’ve got those CBOB/RBOB prices in the $3.80-$3.90 range, and that corresponds to a 0-cent margin price estimate of $4.59, which is about how much they are charging in our favorite place to buy gas: Sparta, Michigan. Elsewhere, there are still some $5+ around. At the same time, oil prices have been ticking higher the last few days.

Put it all together, and if nothing changes with oil, I think we get through the weekend unscathed, with more stations heading to the $4.70’s and $4.60’s. Let’s make that a prediction, but not a confident one.

I am more confident of this prediction: expect price volatility to continue. As reported on Twitter, trading in oil is “thin”, which means the market is vulnerable to a big move, up or down, if some surprise event comes along. A cease fire in Ukraine? Watch oil crash. New violence in an oil producing country? Up we go. Let’s keep our seat belts buckled. -EA

Updated: June 28, 2022 — 7:02 pm

5 Comments

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  1. In Chicagoland, competition has been slow to develop as rack declined some 8c in the last 3+ weeks as the RBOB CBOB spread narrowed from 50c to 14c. So we’re nowhere near a reset. Cheapest price near me is Sam’s/Costco at $5.38 Downstate in Champaign, where I am heading today, $4.78.

  2. If I was going on a road trip I would definitely check Gasbuddy. $4.05 in Franklin Kentucky today.

  3. In Chicagoland, competition has been slow to develop as rack declined some 70 cents in the last 3+ weeks as the RBOB CBOB spread narrowed from 50c to 14c. So we’re nowhere near a reset. Cheapest price near me is Sam’s/Costco at $5.38 Downstate in Champaign, where I am heading today, $4.78.

  4. Lots of places protecting those margins. Hard to find anything below $4.759 around here.

  5. Crude and RBOB dropped over 9% today. Crude under $100 while the RBOB is at $3.33.

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