Friday, February 28, 2014

Neighborhood stations riding different tracks on gas price rollercoaster

The situation when I wrote Another ride up the gas price rollercoaster was that four neighborhood stations were selling regular at $3.49, which happened on Wednesday.  As for how long that would last, I ventured that "I wouldn't be surprised if next Monday or Tuesday, the corner station tries to go up as high as $3.69 before settling at $3.59."

Today, the corner station raised its price to $3.69 for regular, so they made the first half of my prediction right a few days early.  I'm also sure that the price will drop, but it might go lower than the $3.59 I expected.  The response of the three stations down the street was not to raise prices to $3.55 or $3.59 and then wait for the corner station to drop to $3.65 and then $3.59.  No, they all lowered their prices a penny this afternoon to $3.48.  That's a surprise, and it makes me think that the corner station might return to $3.49 this weekend after finding themselves out in No Man's Land.

As for the longer term picture, I still expect prices to go up.  Gas Buddy shows that the national trend of steading increases in the average price has continued unabated, with the mean currently at $3.44.  The Detroit average jumped up yesterday to $3.60 and is now at $3.63.  This follows the same pattern I described two days ago.  However, if the price rise then follows that pattern, then the current step up has crested and the metro area's average should decline slowly.  The next time the corner station raises prices, they likely will stick and the neighborhood price will settle between $3.55 and $3.59 inclusive.  That's next week.  Right now, enjoy the gas war.

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