A good DOE report, good news here, good news there, congress acting… blah blah… prices are falling!
Wholesale gasoline prices, as you can see from the ticker on the left have been taking another beating this afternoon after a quiet morning.
Prices at this hour are down nearly another 11-cents… meaning nationwide price averages definitely should be going under $4 the next week or two! Grand Rapids and the Midwest could easily see $3.60’s soon, some places in Ohio should see under $3.50! This will definitely take time to reach… each day a station waits to replenish its supplies could save it hundreds, perhaps thousands of dollars!
Prices will be slow to come down, but they ARE falling!
The DOE report showed oil supplies dropping by a smaller than expected amount, and gasoline stockpiles rose AGAIN… they are now ABOVE the upper constraint of the average range for this time of year. Demand is way down, demand destruction is rampant and likely permanent. China is feeling extreme pressure to pass yet another price hike on to its gasoline consumers, which would yet another attempt to stifle increasing demand and huge losses from Chinese refiners.
Also, I’m debating making an opinion regarding any new drilling in Alaska (since everyone is making it a huge issue). If you’d be interested in hearing my opinion (from a non-partisan point of view), leave me a comment.
So again, in the mean time, I’d only put minimal amounts of gas in your tank, prices will be going down everyday!
Patrick
Today’s market slid over 13-cents per gallon on positive news coming out of China: they’re finally lowering subsidies on oil and fuel products.
The market immediately turned south after realizing that one of the biggest developing nations was now passing on higher prices to its consumers. This has the potential to turn the whole market around as traders finally realize that sustained oil and gasoline prices at these levels will kill off demand, even in developing countries that rely on it.
With the added news that the Saudi’s are increasing oil production, the market may correct… however, I doubt any correction to bring prices down more than $1 as oil stockpiles are tens of millions of barrels lower than last year, and oil inventories remain much below average.
We still may be poised for a mid-to-late summer decline, as long as Hurricane season stays in check.
For now, wait to fill up. Prices should moderate through the weekend, with potential of $3.95’s coming out within the next 5-7 days. We also may be poised for a jump in the market tomorrow. It’ll either be a small jump or another significant decline.
Patrick
After fielding through a few phone calls and seeing a news spot on Channel 8 “Gas Surprise” I wasn’t sure what to expect this morning. I logged on Channel 8’s site to try and find a gas story to see if I had missed something. Not really.
I then had a few text messages asking if gas was going up today, some sort of rumor? Well its not.
However, I believe with today’s news (Goldman Sachs upping oil forecast for 3Q&4Q to $141, China needing Diesel for recovery efforts) that we’ll see record oil prices (already over $127). Gasoline and diesel/heating oil are already way up, gasoline up 7 cents and diesel up 8 cents.
As long as these price increases stick tonight, I’m confident we’ll see $4.05-$4.15 come Monday (or as late as Tuesday if stations want to lose money), so MAKE SURE YOU’RE FULL on Sunday night.
Diesel will continue its climb to near $5 on this news and global supply worries, and I really don’t see an end in sight.
The pain at the pump continues.
Patrick