Monday, September 5, 2022, 5PM: The Whiting refinery problem appears to be solved. Prices rose in Indiana last week, but continued to decline slowly in Michigan. Coincidentally, on Thursday, a reminder I sent to myself a year ago popped up: “Either my wholesale gas calculation is inflated each September, or Big Red and others are more willing to tolerate losing money at the pump when summer ends.”
Every year at this time, I seem to go through a “predict-a-hike-and-then-be-WRONG” cycle, and here we are again, although this time it started in August. But I tell you, something is really odd about Michigan gas prices lately. What is most telling is when I went to Costco late last week to fill up. Costco will sell below cost, and they were asking $3.57 a gallon. But a lot of places in west Michigan are getting close to the Costco price, which is weird. Meanwhile, crude oil is at its lowest price since January, when the gas price madness of 2022 began.
Take it all together, and I am making no prediction again today. There is a case to be made for a system-wide reset to $3.79, but September history suggests we’ll be fine until at least the autumnal equinox on September 22. I need to buy gas, so I’m going to fill up for $3.59 or below Tuesday morning. -EA
GPM Moving to 3.99 in Northern Michigan. Now to see who follows them after sitting at or below cost for the Holiday weekend.
Rack price in Chicago for Chicago-Milwaukee blend (from OPIS) at $2.73 today, lowest since March 2.
Saw a few Marathons in west Michigan move to $3.99 on Tuesday evening. Just saw the one in Standale is still at $3.99. No one else seems to be following yet, and $3.99 seems a bit of a reach, given wholesale prices.
Ed, there have been refinery issues for the past week or so (not just Whiting) and wholesale fuel is scarce. Many locations were at or below cost over the holiday weekend and freight costs have increased right along with the price of diesel.
$3.79 Grand Rapids
Sportrac…Yup they raised prices while watching spot fall today by nearly 18c. Instantaneous extra profits, aka greed. Has happened several times in Chicago over the summer, but not today. No hike here as summer blend ended and our spot price fell 54 cents.
Just noticed that Speedway has now gone to a 50c per gallon spread in the Chicago market. Premium $1 more than regular.
In Ohio, Thornton’s has gone to 40 between 87 and 89, and 30 between 89 and super.
Tepid reset to $3.99 by Speedway rolling out this evening. A fair number of stations were already above that and aren’t coming down. But had been as low as $3.53 near me.
above, of course, for Chicagoland
If I’m calculating right (and I’m probably not), CBOB is around $2.58 ($2.46+.12 cent spread). $3.99 seems a bit ridiculous.
ChrisDG74…I normally get the daily CBOB and RBOB through Pat D but he is in Europe now so I’ve use Murphy on the rare day it reports on Chicago gas or guessed based on the CME BYMEX RBOB futures. Friday was a case where Chicago CBOB jumped a big chunk vs NYMEX futures, residual of the Whiting refinery issue which apparently was not 100% resolved. I do know the Chicago RFG wholesale price jumped 17c to $2.79 Friday, but did decline to 2.76 today/ Speedway’s hikes, at the approximate current wholesale (since IL has a sales tax, the expected margin rises with price), have tended to be $1.30 or more add on, so was expecting at least $4.09 here yesterday. Of course taxes are higher here, but CBOB and RBOB for Chicago were basically the same price a week ago with an early end set to the summer blend, which s so much more costly.