Category: Announcements

Nothing like a 40 cent difference in prices in the same county

Comment on the April 31 prediction: No hike the past week, which is what I was suggesting. CORRECT.

Sunday, May 7, 2023, 2:30PM: Oil is down $5 a barrel the past week, as these scattered bank collapses are rattling energy investors. NYMEX gas has followed, down 13 cents a gallon. And we are seeing some nice prices in west Michigan, including $3.17 in the Jenison and Hudsonville area. Prices are as much as 40 cents higher in other parts of Kent County!

If oil turns around a bit this coming week, I expect those $3.17’s will reset to $3.39. It would be nice if the $3.59’s dropped to $3.39, too, but that’s not how the Game usually works. So, fill up tonight if you can. -EA

Current Price Target is $3.39

Comment on the April 16 prediction: CORRECT, as we saw no hikes the past two weeks, and slowly dropping prices.

Sunday, April 30, 2023, 2:00PM: We are having one of our occasional data issues from our source for local CBOB/RBOB prices, so apologies to those following The Spike Line. It also makes it harder to analyze and predict, but using widely-available New York prices can give us a clue. Basically, wholesale prices have been drifting lower, following oil prices, and retail prices have followed. For instance, for the Fort Wayne stations I monitor, after a hike to $3.75 on April 11, prices have been working their way lower, now $3.34. Retail prices have been stickier, in west Michigan though.

What’s next? The beginning of May is always a good time to take stock, as summer approaches, and I doubt we are going to get a repeat of the upward price shock that occurred in late May/early June last year. My plan this week is to fill up for as close to $3.39 as possible. So, I am heading to Hudsonville later this afternoon! -EA

Sometime between Today and Labor Day, They’ll Reset Prices

Comment on the July 24 prediction: CORRECT, as prices continued to plummet.

Sunday, July 31, 2022, 2PM: For gas prices, this has been a remarkable, historic year. We started 2022 with gas at about $3 a gallon, watched it climb to over $4 by early March, due to the Russia-Ukraine war, then it backed off, and then that crazy, unprecedented early June series of 20 cent hikes, to over $5 a gallon. Since June 6, it has been nearly two months of prices dropping one or more cents per day, and now we are getting close to $4 a gallon again at a typical station. As I’ve written previously, I think the June hikes had something to do with some trading shenanigans, while the behavior since June 6 has actually been much more typical, when the gap between retail and wholesale prices is large.

It is time to ask ourselves when to expect our 7-11 friends and others to look at the range of retail prices right now, and the wholesale price, and hit the button for a system-wide reset. I guess the answer is, “Not until we have to”, because why not keep retail prices higher if they can? The only things that brings prices down is competition and a lack of customers. So, to those station managers that continue to look to undercut the competition in their neighborhood, even by a penny at a time, thank you. Keep it up. As to “lack of customers”, despite all the recession talk, west Michigan roads are full of traffic, and I haven’t seen that slow down yet.

Prediction time: wholesale prices right now suggest that filling up their own tanks with fresh gas may be costing retailers something like $3.59, so that’s our floor right now. I am still seeing way too many $4.39’s and higher, so I would be shocked if there was a price hike this week. If they are a bit OCD at headquarters about prices, I could see a system-wide reset, but it would be something like $3.99. That would be OK. -EA

20 Years of The Gas Game!

It was twenty years ago this week when, on a sleepy Sunday morning, the Grand Rapids Press published my essay on predicting gas price hikes. Sorry, I can’t find it online, but here is how the essay began:

  • Constantly changing gasoline prices upset everyone. Many letters have appeared in the Public Pulse in the past year, and now politicians are involved.

Also in June 2002, the first version of this website was established, and this was the first prediction:

  • Wednesday, June 12, 2002: Gas price in Standale this morning was $1.34. Expect prices to continue to decline until early next week, getting down to $1.24.

And, funny, that prediction was WRONG! Since then, though, we’ve been CORRECT around 70% of the time, I’ve shown up on the local news, my Gas Buddy Patrick DeHaan launched his career as a energy markets analyst and frequent media contributor, and we’ve seen prices soar and collapse several times.

For newer readers, how does this work? It begins with the observation that, at least in the Midwest, there seems to be a silent whistle that goes out every once in a while and all retailers reset their prices up to a new value. (Most recently, that was $5.19.) Then, thanks to competition and hopefully a pause in upward wholesale pressure, prices start to fall, pennies per day, and it is varies depending on location. At some point, the whistle blows again, and our goal is to predict that hike a few days before it happens, and fill the tank at the lower price.

How do we do this? We start with any information we can find to estimate the wholesale price of gas. Typically, this involves using some “futures prices” which are set in publicly-traded markets, factoring in a chunk of federal and state taxes, as well as fudge factors like the cost of transporting gasoline from refineries to retailers, and then estimating the “margin” the retailers add on, based on their behavior with previous hikes. When the current retail price reflects a margin close to zero, that’s prime time for a new hike.

Since 2002, we’ve added to the Gas Game team, and we hope we’ve saved you a few dollars over the years. Or, at least given you a bit more feeling of control when it comes to the filling the tank. I know I have enjoyed moments of, “Going to fill up today and watch prices jump tomorrow”.

Will we do this for another 20 years? It is tempting, because I predict that Big Red and other retailers will continue playing their own games. Economists studying the matter seem to believe that it is inevitable, given the mix of competition, wholesale market trends, and consumer behavior.

Thank you to our loyal readers! — Ed Aboufadel, Ada, Michigan.

p.s.: No obvious sign of a “silent whistle” for the first half of this week.

Going Into June, No Relief in Sight

Comment on the May 24 prediction: CORRECT, as prices didn’t do much of anything last week, other than a small price war on Alpine Ave. in Grand Rapids.

Monday, May 30, 2022, Noon: Oil prices moved up a few dollars at the end of last week, which I view as one of those near-holiday moves with many traders already on vacation, so it is unclear if that move will translate to a price hike this week, but NYMEX prices rose a bit, too. This is certainly not an environment that would drive gas prices lower, although there are hints of “demand destruction”, meaning fewer customers stopping by to fill up.

Advice of the week: See if you can fill the tank for under $4.49. Don’t be surprised if there is a small hike ($4.69?), but most likely prices don’t move much this week, similar to last week.

Knocking the Board Game off of the Table

Comment on the March 4 prediction: Although we were living in price-hike territory most of the week, we never saw that jump in future prices that would have triggered a hike. WRONG again.

Sunday, March 8, 2020, 7:00PM: We have moved into a time of extremely unstable markets. As I type this, oil futures are down 20+% in Sunday night trading. That could be the panic selling that marks a bottom, or it could be something more ominous. Stock futures aren’t looking so hot, either. It’s like when you are kids playing Monopoly, and your brother is losing and knocks the board off the table. The easy prediction is more and more gas prices below $2, but there is no clue as to when prices will stabilize. -EA (c) All Rights Reserved Frontier Theme