Thursday, August 29, 2013

The fear premium strikes again over Syria

I made a prediction in The corner station finished its retreat.
I expect the price to hold through Tuesday, when the corner station charges into No Man's Land again.  It might take the nearby stations with it, as Econobrowser shows the closing price of Brent crude to be $111.04, which translates to an expect price at the pump of $3.61.  That's slightly above the national average of $3.57 and the Detroit average of $3.59, which has risen 10 cents in one week and 15 cents in two weeks.  At 14 cents below the regional average, it might be a good idea to fill up while the price lasts.
I was wrong about the price rise happening Tuesday, but that's all.  Yesterday morning, the corner station jacked up its price to $3.79, while the three stations down the street were still selling regular at $3.45.  This evening, they followed the corner station with prices of $3.78.  The corner station took them with it.  I was right not only to fill up my car, but to fuel up my wife's.  Of course, the saber rattling over Syria's use of chemical weapons helped push things along.  The fear premium strikes again.

Speaking of the fear premium, Econobrower lists the closing price of Brent crude yesterday at $116.61, a jump of $2.25 and 1.93% from the day before.  That translates to a national average price of $3.75.  That's well above the national average price of $3.59, the Detroit average of $3.62, and even the Michigan average of $3.67.  Expect prices to keep rising, although I think the local gas is fairly priced given the current price of oil.  That written, the fear premium can continue to go up if tensions increase and more countries get involved in Syria's civil war.  Stay tuned.

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