Posted in: Gas Prices,
by Patrick DeHaan on Feb 5, 2010 12:22 PM
In a week that has been more volatile than any recent week in memory, wholesale prices spiked mid-week, sparking increases at retail pumps. However, wholesale costs have crashed yesterday and today, hosing motorists who have to pay more as stations pay less.
What a week! I saw oil rise the most it has in months on news of colder weather, and an unexpected draw in gasoline stockpiles. A day later, oil lost all its gains on news of Central Bank concerns in Europe and a stronger dollar. Today, the sell off suddenly has gained momentum. Oil prices at this writing are off over four percent, and under $70. Wholesale gasoline is also trading much lower, off some 10-cents per gallon.
Gains early in the week were significant- enough to boost retail prices a penny overnight nationwide, with some areas of the Midwest seeing increases of 25-30cents per gallon. The timing couldn't be more off for motorists. Gas stations saw their cost rise sharply, raising their pump prices in response. Will stations now lower their price back to their week ago level as wholesale prices have dropped nearly 20-cents per gallon in just two days?
Meanwhile, all signs continue to point to lower prices. The dollar is improving significantly, trading against the Euro at prices not seen since May 2009. Even colder than expected weather isn't fueling the bulls today.
Bottom line for you this weekend- don't completely fill your tank. Many areas of the country (if not all!) will see prices slowly falling this weekend as long as these lower wholesale prices hold for just a few more hours.