Tag: WZZM

Ed takes easy way out: no price hike this week

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Comment on Thursday’s prediction:  Prices fell below $2, so the prediction was CORRECT.

Tuesday, November 11, 2008, 5:15 PM:  WZZM-13 stopped by my office yesterday, and the best I could say is that when I started the Gas Game, gas was below $1.50, and during the decade, it went up past $4.  For the most part, my techniques to predict price hikes worked in that environment.  The past two months, with gas prices falling more than 50% and with financial companies, the stock market, and the economy falling apart in the background, it isn’t clear anymore at what point Speedway and friends will be back to looking for opportunities to "re-set at a 20-cent margin", as opposed to, "how much should be drop the price today so that we get some business."  It is easy right now to predict each Sunday that the Lions will lose.  I am going to do the same with gas prices:   predict no price hike this week.  At some point, I will be wrong.  (And at some point, the Lions will win.)
 

GR Gas Prices: Ready for a fall?

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Well, the tide may have finally turned Monday for gasoline prices.

Monday we saw prices drop roughly six cents. Today, after a morning
of flat trading, gasoline took another five cent dive to 2.05. We’ve
shed roughly 11-13 cents in two days.

A few weeks ago I said I didn’t think we’d see $3 nationwide this
summer. I think we “rounded the corner”.
We hit the peak. While prices may stay around this level for a while,
we should see things calm down, and PERHAPS… as I told WZZM13 a few
weeks ago, we have a CHANCE of seeing around $2.50.

Stay tuned. Gas prices should fall the next few days, so no need to
rush to the pumps. The DOE Report tomorrow will be a pretty big
report as well, as I expect refiners to have used around 88.5%-89.2%
of their capacity as they start producing lower RVP summer gasoline.

~Patrick

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$1.85 widespead, sneaky hike possible?

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Woaaaa!! Where do I start?

How ’bout the DOE report.

Refineries operated at just 87.9% of capacity last week. The week before they were at over 91%! Whats changed? Profit. It most likely has been dropping like a rock. With lower profit, refiners aren’t encouraged to pump out products, so this doesn’t surprise me.

With the much lower refinery utilization, crude oil stocks swelled. They gained by 6.8 million barrels (WOW!) When I first saw this, I thought that gasoline stocks would have been lower, but no! Gasoline stocks had a 3.5 million barrel gain, bringing them to the upper end of the average range. With the colder weather, I anticipated a loss in distillate fuels. Nope! Distillates rose by nearly 1 million barrels. An excellent DOE report.

Now, off to check PADD storage to see if Midwest storage rose!

Well, looks like Midwest product storage rose to 55 million barrels. Who is ready for the Chicago Discount to get a touch bigger?

All signs I see are pointing to Grand Rapids Gas Prices coming down to around $1.85. If we see a large selloff today due to the unexpected gain in gasoline, we *COULD* see $1.79, but I’ll get back to you on that. Just look for $1.85 widespread soon.

Anyone else notice all the media stations covering dollar-plus gasoline? Its crazy. I think everyone did. The Press, WOOD8, WZZM13, etc. Amazing. Unfortunately guys, the lower price might increase demand. If that happens, we’re going to wipe out all the excess fuel before Spring. I hope that doesn’t happen.

So! The final words? No hike this week. Watch for $1.85 over the weekend, but be WARY. We *COULD* see a hike somewhere sneak past me. Grand Rapids has dropped faster than the national average AND we’re lower than some of the “cheap” cities (those that always have cheap gasoline). (Wow- OK, so I just checked Tulsa Gas Prices- they are ALWAYS cheaper than us. I see most the listings at $1.92, but two are at $1.72… does that mean even LOWER prices? I’ll keep an eye out!)

Enjoy it.
~Patrick

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WZZM news Sunday

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I was contacted by WZZM-13 last late week regarding gas prices, and some of you saw me on the news on Sunday. In preparing for the interview, I did a review of what has happened the past five years in March, and a pattern emerged. In four of the five years, we had a ramp up in prices starting in mid-February, and lasting to about the end of March. I think this has to do with refining capacity dropping this time of year due to maintenance. This year, the switchover to gas without MTBE is another factor which has caused all the price hikes. So, starting around 02/15/07, I’ll be the price-hike predictor for a month.Though the futures are off 3 cents this morning, that price hike to $2.65 last week has disappeared in many places, so we could easily get a price hike to $2.69 by Wednesday. Consider that a prediction. I’ll also predict that, unless we get some unforseen natural disaster or war, prices will be lower in April and May. I got sucked into the multiple price hike hysteria; the prediction of a Wednesday hike was WRONG.

Tuesday, August 16, 2005

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If you saw me on WZZM-13 last night, you heard that I said that yesterday’s price hike to $2.79 was unsustainable. Let me explain: I use an Internet site to estimate the wholesale price of gasoline. Then I add in taxes and a few other things, and finally I add in my estimate of the margin retailers are trying to earn on each gallon of gas sold. For the past four years, when there has been a price hike, it is to re-set the margin at 20 cents. As the 20-cent margin price on Monday was about $2.69, a hike to $2.79 seemed a bit excessive. Already this morning, a few places in town are back to $2.69, and at the Speedway I monitor in Fort Wayne, Indiana (using the Internet), they took 10 cents off of the price this morning. It helps that wholesale prices went down yesterday, too. So, expect falling prices today and tomorrow, and I don’t know yet about Thursday and Friday. We’ve made it to the end of Wednesday with no new price hike, and prices falling slowly but surely around time, so the preciction was CORRECT.

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