Friday, May 30, 2014

Prices shoot up for summer driving season

Before I update the situation in the local gas war, it's time to check the prediction I made in Gas prices jump in time for Memorial Day.
Once the corner station drops its price to $3.75 to match the other three, which I expect it to do tomorrow the comparison then will be to the lowered prices on the 24th of last year.  That weighted average was $3.78.  This year's prices will be lower than last year on the same date even if the corner station doesn't drop its price, which it will.
The corner station did lower its price to $3.75, but on Monday, not Saturday as I predicted.  Even so, prices remained below last year at this time, as I had calculated.

After that, I decided not to extend my forecast.
As for predictions beyond the corner station matching the neighborhood price, I'm not going to make them today.  It's a holiday weekend, and I'm going to stop while I'm ahead.
That ended up being a wise decision, as the stations did not raise their prices on Tuesday or Wednesday, as I would have expected.  Instead, all four of them jacked up the price for regular to $3.95 on Thursday.  I would not have predicted that.

Follow over the jump for why I was been surprised, who wasn't surprised, and the reaction and reasons for the price rise.

Looking at the national average at GasBuddy wouldn't have helped.  That price composite has not yet reached $3.65, so it is still at the $3.64 I reported last time.  Neither would the Detroit average.  That slid slowly from $3.83 a week ago to $3.82 Wednesday before going up to $3.85 Thursday.  There is nothing there to indicate neighborhood prices shooting up 20 cents, 10 cents above the metro average.  GasBuddy also shows that West Texas Intermediate was actually going down, so that's not it.

A price rise like this usually gets the attention of the local TV stations, and this time was no exception.  Here is WXYZ reporting Gas prices rise over $4 a gallon in metro Detroit.

Welcome to a combination of summer driving season and the fear premium, this time from the situation in Ukraine.  I wouldn't be surprised if there were refinery issues, too.

The one person who wasn't surprised was Patrick DeHaan of GasBuddy, who said he thought gas prices might spike in Michigan on Thursday in WOOD-TV's Cheapest days to buy gas.

Also, gas prices locally are above where they were last year, when I wrote in The corner station returns to form in the local gas war that all the neighborhood stations were at $3.85 a year ago Thursday.  Based on all of the above, I'm going to continue to abstain from making predictions.  Instead, here's some good news about gas consumption and air pollution from the University of Michigan: Vehicle emissions from new vehicles at record low.
May 5, 2014
ANN ARBOR—Fuel economy of new vehicles sold in the U.S. backed off its record high last month, but average monthly emissions are now at an all-time low, say researchers at the University of Michigan Transportation Research Institute.

Average fuel economy (window-sticker values) of cars, light trucks, vans and SUVs purchased in April was 25.2 mpg, down 0.2 mpg from March, but still up 5.1 mpg from October 2007, the first full month of monitoring by UMTRI researchers Michael Sivak and Brandon Schoettle.

"This change likely reflects the increased proportion of light trucks among newly purchased vehicles," Sivak said.
That's about the only good news to report today.

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