Friday, May 4, 2012, 9:30AM:  We appear to have entered one of those periods again when Speedway and friends try to increase their margins, leading to price hikes 10 cents higher than typical, and Wednesday was another example of that.  Good news for us motorists is that Chicago wholesale prices have tumbled 20 cents since Monday, and my estimate of the price to retailers today is $3.59.  Historically, retail prices can get to 10 cents below cost, $3.49 in this case, so we have a long way down to go from $3.99.  Count on prices dropping considerably the next several days. — Ed Aboufadel

Saturday, April 28, 2012, 8:20AM:  For educational purposes, let’s take a look at Thursday’s price hike.  Completing my Gas Game spreadsheet Wednesday night, I had recorded a NYMEX price of $3.14 (averaging the current and next month’s futures price) and a Chicago wholesale price estimate of $3.00 per gallon.  These days, I tend to use the Chicago estimate, and it corresponds to an estimated price to retailers of $3.70.  Historically, retailers have gone to as low as 10 cents below current cost before initiating a price hike, and then they usually hike to 10 cents above cost (what I used to call the 20-cent margin price).  So, the price hike was a bit of surprise to me, as I was recording prices in the $3.70′s in Grand Rapids, and the upper $3.60′s in Fort Wayne, and the hike was to $3.89 (kind of a 30-cent margin price).  It is as if the Chicago wholesale price was $3.10, not $3.00.  Further evidence that this was an unusual price hike includes the following:  (1) as reported on this site in the comment sections, some non-Speedway retailers were rather slow to agree to the hike; (2) retail prices in Fort Wayne have already dropped at least 6 cents a gallon, and they are at $3.72 a gallon on Fuller Street in Grand Rapids; (3) my brother called from Fort Wayne and complained about Thursday’s hike, which he rarely does.

Looking to next week, wholesale prices jumped a bit on Friday, and retail prices are already all over the place.  That feels like one of those situations where some time next week, there will be a price reset ($3.89 again?) that all the stations agree to almost immediately.  I’m sure the secret e-mail will say, “No fooling around this time.” -Ed Aboufadel

Wednesday, April 11, 2012, 10:00PM:  It appears that Chicago wholesale prices fell dramatically last week, which has led to retail prices falling from $4.15 to $3.79.  But, we got a jump today of 13 cents wholesale, and that is a set up for a price hike.  That, and I have to drive tomorrow to Lansing and back.  We could re-set to as much as $3.99, but not above it.

This week, I was contacted by the National Association of Convenience Stores. They have written a position paper, “The Banks’ Hidden Windfall As Gas Prices Rise“, and because I agree with their conclusions, I wanted to let readers know about it.  I don’t have any relationship with this organization, though.  –Ed Aboufadel

Speaking of the market, You may have noticed that oil and the Chicago spot both fell this week. The Chicago Spot fell just in time, as we were ripe for a spike today if it hadn’t. We are down more than 25¢ since Monday, and oil is down almost two dollars after the one dollar rally up today.

That leaves us with a very big cushion going into this weekend. Hold off on gas because it should fall this weekend.

Monday, March 26, 7:45PM:  Wholesale prices have risen 10 cents since Thursday, while retail prices have drifted lower by about a dime since then.  You know what that means:  price hike to $4.09 or so is on its way, probably Tuesday.  That’s a prediction. — Ed Aboufadel

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PRICES WILL INCREASE TOMORROW (FRIDAY, MARCH 9).

Cancel my earlier prediction that prices were going to continue falling through Monday. The Chicago spot market closed today up 12.16¢ (3.93%) to $3.214. That makes $3.87868 the new spike line, which is 3.568¢ above the Michigan average of $3.843.

Normally, I’d say prices are going to $4.099, but that $4 barrier is one to be avoided and competition will bring it quickly back down to $3.999. I don’t know if we should expect $3.999 or $4.099. Either way, prices will most certainly increase tomorrow beginning at 10 a.m. ET in significant portions of Michigan’s lower peninsula, Indiana, and Ohio.
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I think he hit it on the head as that was exactly what I was thinking. Except for one possibility. It may hold off until after the weekend. Hey, stranger things have happened.

I don’t expect us to cross the $4 barrier yet, and stations are usually reluctant to do so. But I can see us pushing at or near $3.99, probably falling in the $2.85-89 range either today or tomorrow. Keep an eye on the comments of this thread for when the spike finally comes.

Thursday, February 23, 2012, 6:15PM:  Well, I picked a good time to go traveling and have wall-to-wall meetings at work.  Two hikes this week, and we are sitting at $3.69.  Why?  As noted in earlier postings on this site, Chicago wholesale prices plunged earlier this month, while wholesale prices in other places like New York didn’t.  That was a temporary situation, and now it is correcting with our prices rising to get in line with the rest of the country.  Then we get the jacking up of oil prices related to world tensions, for which politicians are blaming speculators (and they may have a point).  Combined, wholesale prices rose 60 cents a gallon this week, and that is why we are at $3.69.  So, now what?  While we are at the mercy of the market forces, there is also a sense of panic in the air, which never amounts to anything.  So, all those people predicting $5 a gallon gas by Memorial Day should calm down.  They may be right, but that would be an incredible move in prices for which there is little precedent. –Ed Aboufadel

The big question is when? Tomorrow is the most likely to me, although the possibility of them waiting until Thursday since it’s so close to the last adjustment up is possible.

Now, I’d like to answer a couple things from the last post’s comments.

Diether stated that, “Some of the prices on that chart (Today In Oil) are mid-day quotes.”

Actually, they are all EOD, although I’m sure I gather the information from a different place. I get mine from DTN.

TimmP said

“Stupid question/suggestion. Would it be possible to have a running 60 day graph of the CBT spot prices of wholesale gasoline in the Spikeline (or anyplace) on this site?”

I don’t have the wholesale price, but I do have the price adjusted to the SpikeLine on the charts on the Spike Line page (look under “Features” at the top.) There are charts for Indy, Indiana, Michigan and Ohio there. Updating these takes some work, so I usually do it weekly. I’ve done what I can to improve the process, getting the time is my issue now. Your question has given me a thought about putting a chart on the Today In Oil page (also under features) as well. Again, time will dictate when that happens.

Happy price hunting, all. It’s gonna get rough the next few weeks/months!