Comment on the May 7 prediction: Oil did not “turn around a bit” the past week. In fact, it closed lower at $70. So, no reset to $3.39, and technically, the prediction was CORRECT.
Sunday, May 14, 2023, 3:00PM: Let’s start today with diesel prices, as I’ve noticed retail prices dropping below $4 in west Michigan, the lowest since February 2022, when the Ukraine war started. Today I learned that diesel is named after its inventor, German engineer Rudolf Diesel. Diesel fuel, which is less refined than gasoline, is thicker. Retailers are a lot less interested in playing a “Diesel Game” with prices, and diesel prices tend to be a better proxy for overall energy prices than volatile gasoline prices.
During the Ukraine war, diesel prices climbed from about $4 a gallon up to $5.99 last June, when gas prices were also over $5. Because trucks typically have diesel engines, some of the inflation that we have seen in the past two years is paying for higher costs to transport stuff people buy, like food.
For oil, diesel, and gas prices, it can be said that the market has finally adjusted to the disruptions of the war, or that the market is signaling that end of the war is near. Either way, that is good for us.
Not so good for Michigan is that prices rose the other day in Indiana, and from the heat map, it looks like also in Ohio and Illinois. But in other states west of the Rockies, prices are muted, reflecting that $70 a barrel oil price. It looks like the 0-cent margin price in Michigan is $3.19, so anything cheaper (hello again Hudsonville and Jenison) is a bargain right now. I suspect they’ll take a shot at a reset to $3.39 or $3.49 on Monday or Tuesday. -EA
April 27 was Speedway’s last attempt to reset prices in IL. The state and Chicago averages have been easing since. Speedway is not lowering prices as quickly as they used to. An extreme example is one near me that has bounced between $3.89 and $3.95 the last week or two while competitors just up the street have dropped from $3.75 to $3.69 as of today. I think IL has been luckier on diesel prices. We’ve seen a fair amount of under $4 for the last month or two.
50 cent spike today in Flint. Speedway went to 3.69 before lunch, and everyone has been slowly but surely following suite. Fifty. Cent. Spike. Why?
There is something flaky about this Midwestern hike. Of note this morning is that in Standale, Marathon (of all retailers) is holding at $3.35.
3.69 in Northern Michigan as well, but only a 30 cent hike to get there. Who owns the Marathon in Standale? Quite a few of them are small independents.
Over the weekend, drove to St Louis. They were 40 cents cheaper than Ohio, and only had a 20-cent spread between grades. Ohio is now at 50 cents. I can remember when it was 6 or 7…..
Hike to $4.19/4.29 in Chicagoland. Third straight hike which created margins 20c higher than hikes previously produced.. I think we have a new normal.
$3.59 poping up in Muncie Indiana
$3.699 Indy area Greedway hike underway.
Gas Buddy this morning has a price hike alert of $3.59 in the Greater Cincinnati Area.
Haven’t seen it yet but I’m sure we will be in the throws of it by afternoon rush.
$3.599 started rolling out in sw Ohio yesterday afternoon. Managed to top off for $3.23 in Loveland.