Comment on the October 27 prediction: Two days after my post, prices reset to $3.29 in Michigan, so the prediction was WRONG. Then, prices gravitated towards $3.

Sunday, November 10, 2024, 8 AM: My read of wholesale prices out of Chicago is that they have been pretty steady since Labor Day. Out of Detroit, there has been more volatility, as you can see on this chart, but they have been in a downward trend for the past six weeks. That Detroit trend has helped push prices noticeably below $3 in Michigan in certain places, like Greenville.

However, we continue to live in the higher-margin world in 2024, with less tolerance by those who define retail gas prices for the 0-cent margin price (which I estimate to be in the $2.60’s). With the election over, I think we’ll see an attempted reset in Michigan this week in the $3.19-$3.29 range, which would be consistent with how the Game has been playing out this fall. I would be looking to fill up below $3 today or Monday. -EA

Comment on the October 20 prediction: Prices slid last week and the prediction was CORRECT.

Sunday, October 27, 2024, 10 AM: There is no trend to wholesale prices and there is speculation that they will go lower this week after the latest in the Middle East. Meanwhile, retail prices dropped some last week, but I think they still have a way to go. I would be hunting around for $2.99 gas this week, in Michigan or elsewhere. As I wrote a week ago, unless something unexpected happens in the futures market, I am not expecting a hike this week. -EA

Comment on the October 13 prediction: CORRECT as predicted, as they listened and pursued a modest hike to $3.39 on Monday.

Sunday, October 20, 2024, 6 PM: Since Monday’s hike, oil prices ticked lower, as did wholesale gas prices. Retail prices in west Michigan are starting to fall, slowly. Other than in the northern part of Kent County (such as Greenville), it is pretty much in the $3.19 – $3.39 range. Unless something unexpected happens in the futures market, I am not expecting a hike this week.

Go Green!

-Ed A.

Sunday, October 13, 2024, 7 PM: Let’s talk about what happened last week. On Wednesday the 9th, we continued to be in this situation: a wide range of retail prices, oil ticking up (and bouncing around), and months of aggressive pricing to the upside in Michigan. That was a recipe for a price reset, and on Wednesday evening, Marathon made its move, posting $3.59 at several stations in Kent County. This was 20-40 cents higher than their competitors. Next step, naturally, is that other retailers would follow suit so that by Thursday afternoon, it would be $3.59 throughout Michigan. In fact, for the Speedway station I watched in Fort Wayne, they went from $2.91 on Wednesday to $3.39 on Thursday.

In Michigan, that didn’t happen. (Hooray!) Instead, other retailers that I observed continued the typical drop of a few cents, and today you can find gas under or close to $3 at many stations in Kent County and points east. (I saw this while driving to East Lansing on Saturday.)

So, what happened this time? Did the usual fall lull in gas prices finally find its way to Michigan? Maybe. I am beginning to see that the problem has been at the wholesale level, rather than the retail level. Maybe this strike at a key refinery in Detroit has something to do with it.

What’s next? I predict they’ll try again this week to do a state-wide reset. Hey, Big M, maybe this team be less aggressive (like, you know, $3.29-$3.39), and I’d bet the other retailers will fall into line. -EA

Comment on the October 1 prediction: Imagine my shock that, despite a jump in oil prices after last week’s violence in the Middle East, the first time wholesale prices appeared to move at all was Thursday afternoon. So, the prediction was quite WRONG.

Sunday, October 6, 2024, 8 AM: Gas prices in Michigan remain a puzzle, compared to nearly everywhere else west of the Rocky Mountains. As you can see on this map, Michigan and Illinois are the two states with notably higher prices. In Illinois’ case, they have the second highest gas tax in the country (almost equal to California) and gas prices in cities like Chicago tend to be higher for a number of reasons. While Michigan’s gas tax is in the top 10 in the country, Indiana’s is higher and Ohio is 15th, yet their average prices are notably lower than Michigan’s.

Wholesale prices are around $3, and you can find gas for that price in Michigan today (for example, north of Grand Rapids). At the same time, the average price in Michigan is $3.34, and there are some $3.40’s still in Kent County, after that hike to inconsistent hike to $3.55 on September 25. A wide range of retail prices plus upward pressure on wholesale prices is historically a recipe for a price reset, so find some cheaper gas and fill up today if you can.

I will continue to explore this Michigan gas price puzzle. -EA

Comment on the September 22 prediction: I resisted making a prediction. Prices did rise in Michigan, to $3.55, but it was not a consistent hike.

Tuesday, October 1, 2024, 4 PM: I spent the weekend at MSU, with no time for writing an update. During the weekend, I spotted $3.19’s along I-96 near the interchange with I-69. Those are two truck stops that compete hard with each other, and I suspect that they did not embrace the $3.55 hike.

But here we are this afternoon with new violence in the Middle East, leading to oil jumping more than 2%, back above $70. Of course, wholesale gas prices will follow quickly, and they will probably pass that along to consumers, maybe as soon as tomorrow. Combine that with the lack of enthusiasm for last week’s silly hike, and I think we are talking at least $3.59. I will fill up first thing tomorrow, just in case. -EA