Sunday, June 1, 2014

Everyone retreats in the gas price war

Last Friday morning, I posted
Prices shoot up for summer driving season.
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.
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.
As I pointed out, last Thursday's price move was really unusual.  Everyone moved up together to a level a dime too high for the local price environment.  The neighborhood stations have since recognized that.  Within an hour after I posted that entry, I passed by the three stations down the street and all of them had dropped their price to $3.85.  Today, the corner station joined them.

That's one piece of good news. Another is that prices are at or below where they were last year.  Right now, they exactly match the price a year ago last Thursday, $3.85.  Better yet, a year ago today I reported Corner station crosses $4.00 line, then retreats to it.
On Friday, the corner station hiked its price for regular to $4.09.  (ETA: one of my friends on Facebook added that the price got as high as $4.15 on Saturday; I missed that.)  Today, its price dropped to $3.99.  I have no idea what the three stations down the block are selling gas for, but I bet when I see them tomorrow, they'll be at or near $3.99, too.
In WXYZ notices high gas prices, I confirmed my prediction.
This morning, I drove past them on the way to work and they were all at $3.99.  I'd have won the bet.
Prices have now returned to being below last year's at this time.  That's good news, but no Professor Farnsworth, as they are at the highest multi-day level of the year.

As for the price trend, the national average has dropped slightly from $3.65 to $3.64 and the Detroit average has leveled off at $3.91.  The neighborhood prices are exactly where they are supposed to be given the local price environment, so they should hold relatively steady except for the corner station making its weekly charge into No Man's Land.

Follow over the jump for the comments from my Google Plus posting of the previous entry in the series.

To my description of "All four neighborhood stations jacked up the price for regular to $3.95 on Thursday.  I would not have predicted that," I got the response of "sarcasm I presume!"  My response was that I was sincere.
Actually, no, not sarcasm.  The neighborhood stations are usually a dime below the metro area price, not a dime above.  While the Detroit average has been rising, it didn't go up to $4.05, but $3.85.  Calling for them  to rise to $3.95 would not have fit their usual pricing pattern.  Also, the price of West Texas Intermediate has actually been going down, so I wouldn't have predicted that prices would have gone up based on raw materials.  So, I might have expected $3.79 to $3.85, but not $3.95.  BTW, the three stations down the block lowered their prices this morning to the Detroit average, $3.85.
As you can see, I get comments and I recycle comments, too.

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