Category: Commentary

2023: A normal year for gas prices

Comment on the November 8 prediction: Almost CORRECT, as retail gas prices continue to fall, but today was the first day where gas was below $3 somewhere in the Grand Rapids area.

Saturday, November 18, 2023, 3:00 PM: We are getting close to Thanksgiving, a good time to look back over the past year with The Gas Game. After gas price chaos in 2020-2022, including negative futures prices for oil at the beginning of the pandemic, and an inflation-sparking price shock the first few months of the Ukraine war, 2023 actually looks like it has been kind of normal. We started the year a bit above $3 a gallon here in west Michigan, watched prices slowly work their way up to $3.99 by early August, and now we are back to a bit above $3 a gallon. That is what a normal year looks like.

So, what’s left for 2023? If we continue to follow the script, prices should find their low for the year in December. A reasonable guess is something in the $2.80’s or $2.90’s. We might get a price hike along the way, although it looks unlikely this holiday week. -EA

Last week’s hike was suspect, the coming drop should not be

Comment on the October 29 posting: That wasn’t really a prediction, either, but prices did rise to $3.49 on November 2.

Wednesday, November 8, 2023, 2:00 PM: That hike last week to $3.49 was ten cents above what I had suggested. You can tell when the retailers are reaching by how the price hike plays out. The evening of Wednesday, November 1, I saw one of the first jumps to $3.49 at the Marathon in Standale. None of the other stations on our near Lake Michigan Drive followed suit until around lunchtime on Thursday and elsewhere in west Michigan, some stations kept their prices in the $3.20’s, all signals that $3.49 was too high.

And today, $3.49 is way too high. Oil prices have dropped to $75 a barrel this afternoon, and that will push wholesale gas prices into the $2.80’s very soon. Retail prices will feel gravity’s pull, so if you can wait a few days, you should be able to buy gas for $2.99 in selected locations. Skip those $3.49’s if you can! -EA

October Gas Price Wise: In Like A Lion, Out Like A Lamb

Comment on the October 23 posting: It wasn’t really a prediction, and what we saw in the past week was prices reset in parts of Indiana, but not in Michigan.

Sunday, October 29, 2023, 8:00 AM: In late September, gas prices reset to $3.79 a gallon in Michigan, oil was above $93 a barrel and going up, but wholesale gas prices were sliding, reflecting the switch from “summer gas” to “winter gas”. Then, oil dropped by more than $10, wholesale gas prices followed, and since early October, we’ve had a pattern where oil and wholesale gas prices have been lower and stable, and retail prices have slooooowwwwwly followed those other prices lower, too. For instance, this morning, $3.02 a gallon in Hudsonville, and finally, prices below $3 in other parts of the state, specifically in South Haven.

So, what is next? We are in a position where any jump in wholesale prices will lead to a system-wide reset, maybe to $3.39 as I was calculating last week. But, there is no obvious prompt on the horizon. So, we’ll keep an eye on the markets for clues, and this is definitely a time to shop around for lower prices. -EA

In Michigan this week, will they reset prices, or not bother?

Comment on the October 15 prediction: Basically CORRECT, as prices continued to slide, but stayed above $2.99 in west Michigan.

Monday, October 23, 2023, 8:00 PM: I just got back from central Florida, where I saw several stations at $2.99, but also as high as $3.35. I also wanted to wait until the end of the day today to take the latest read of the markets. Oil prices were lower today, and wholesale gas prices have been stable and lower all month, which has allowed prices to slowly drop. Seeing $3.09 in the Jenison/Hudsonville area this evening, and finally down to $3.29 along Lake Michigan Drive.

Wholesale prices would allow us to see drops below $3, so now it is a question of whether the retailers will want to clean up their spreadsheets with a system-wide reset to $3.39. (And yes, there are still a bunch of stations above that price.) I can imagine it happening, and I can also imagine prices continuing to drift lower. Yeah, that’s not very helpful, but there was a random hike in Indiana over the last few days, and we’re in the same place in terms of the math. Best option is to fill up for $3.09-$3.19 tomorrow, just in case. -EA

One more week of sliding prices?

Comment on the October 1 prediction: Prices have been dropping all month, but slowly. The prediction was CORRECT.

Sunday, October 15, 2023, 9:00 PM: Looking back at the last several weeks, oil hit a closing high of over $93 a barrel on September 27, which turned into a hike to $3.79 the next day. Other than some strange market behavior on Friday the 13th, oil prices have been dropping, and so have gas prices, particularly as seasonal effects have kicked in. This evening, Lowell is the place to fill up in Kent County, as serious competition has kicked in, dropping the price to $3.23 a gallon. Nice competitive pricing in the Jenison area, too. Prices are stuck in the upper $3.60’s in Allendale, though, as the competitive pricing we saw earlier this year near GVSU has disappeared.

What’s next? Friday’s jump is going to make it hard to get down to $2.99, but gas prices still have room to fall before we get into price hike territory. Seek out prices in the $3.20’s if you can. -EA

Costco Knows That Wholesale Prices Are Down

Comment on the September 26 prediction: Surprisingly CORRECT, as prices rose in Michigan to $3.79 on Thursday.

Sunday, October 1, 2023, 5:00 PM: The hike to $3.79 in Michigan made sense last Sunday, and it made a lot less sense on Thursday, since wholesale prices were dropping all week. Here’s a clue — in stations I watch in Fort Wayne, Indiana, they jumped to $3.79 before last weekend, and at the moment: $3.64. Easy prediction that we’ll see similar action this week in west Michigan. Costco knows … they are $3.36 on 28th Street.

Why did we get the hike on Thursday? Is someone at Big Red and friends reading this blog? -EA (c) All Rights Reserved Frontier Theme