I was able to salvage a prediction in yesterday's The limbo dance resumes.
[T]he rest of the outlets in the neighborhood...are now at $3.32. What did I write last week? "The three stations down the street could drop a few more cents to $3.33 or $3.32 early next week"--called it!Unfortunately, the strict reading of the next prediction won't happen.
Now I just have to wait for the corner station to match them.It won't match them at $3.32, as all of the stations down the street raised their price to $3.45 today. It isn't yet matching them at that price either, as it is still at $3.65. So what went wrong?
First, GasBuddy shows the national average stuck between $3.46 and $3.47 for two days running, while the Detroit average went up for the first time since the end of June, bouncing off the floor of $3.38 to $3.41 today. According to that metric, the local stations are overpriced, as they are usually a dime below the metro average, not four cents higher. They normally would have stayed at $3.32. Something must have spooked the retailers. That something was U.S. action against ISIS AKA The Sith Jihad. Follow over the jump for more.
Bloomberg reported this morning: Crude Rises After Obama Authorizes Air Strikes in Iraq.
Crude oil rose as U.S. President Barack Obama authorized airstrikes in parts of Iraq, OPEC’s second-largest producer, while Chevron Corp. said it was withdrawing some workers.I was wondering when the fear premium would return. The answer was today, as it also hit RBOB, as Natural Gas Intel reported this morning.
Brent for September settlement gained as much as $1.41 to $106.85 a barrel on the London-based ICE Futures Europe exchange and was at $105.81 at 1:31 p.m. London time. Prices are up 0.9 percent this week.
WTI for September delivery climbed as much as $1.11 to $98.45 a barrel in electronic trading on the New York Mercantile Exchange. The grade is down 0.3 percent this week.
In overnight Globex trading September crude oil inched higher by 20 cents to $97.54/bbl and September RBOB gasoline gained fractionally to $2.7727/gal.It wasn't only the retailers who were scared by the news. However, the bounce on the commodity markets didn't last through the day, as Bloomberg reported this afternoon that Brent Crude Slips as U.S. Strikes Seen Protecting Supply.
Brent crude fell on speculation that U.S. airstrikes against militants from Islamic State in Iraq will stabilize supplies from OPEC’s second-largest producer.RBOB is now only up a penny from yesterday, when it closed at $2.7439. That won't support a bounce of 13 cents. Something else might, as Platts posted the following news from the Chicago Board of Trade yesterday: US Gulf Coast, Midwest gasoline differentials rise 2 cents or more.
Brent for September settlement slid 42 cents, or 0.4 percent, to $105.02 a barrel on the London-based ICE Futures Europe exchange. The volume of all futures traded was 18 percent above the 100-day average for the time of day at 3:03 p.m. Prices were up 0.2 percent this week.
WTI for September delivery rose 31 cents to $97.65 a barrel on the New York Mercantile Exchange in volume that was 4.1 percent above the 100-day average. The grade is down 0.2 percent this week.
Gasoline dropped for the first time in three days, down 0.7 percent to close at $2.7537 a gallon on the Nymex. The futures gained 0.3 percent this week.
In the Midwest, Chicago CBOB flipped to a premium to the NYMEX RBOB contract for the first time in seven weeks.That means wholesale gasoline here went up 6.5 cents overnight on top of the RBOB price, which means it's now 7.5 cents more expensive, not the one penny from RBOB alone. Add two more cents for the intraday high on Wednesday on top of all that, and there's the dime increase. It looks like I was right to expect price resistance in Gas falls three times in one week. I finally got it in spades. As for $3.29 for a low, that's not happening, not any time soon. $3.32 will likely stand until after Labor Day.
CBOB for delivery through August 14 was heard traded at NYMEX September RBOB plus 3 cents. It was assessed Wednesday at the futures contract minus 3.50 cents/gal. "It's really ripping today," a gasoline trader said.