Good news, bad news on gasoline front

October 14th, 2008 at 05:13pm Thomas V. Bona

First the good news - we’ve had our first sighting of gasoline under $3 in Winnebago County. The South Beloit Price War has taken prices down to $2.99 a gallon. Rockford gas stations are still generally between $3.09 and $3.25 though.

Now the bad news - we might see a brief spike of prices in this area. Wholesale gasoline prices out of Chicago jumped almost 19 cents today to almost $2.44 a gallon.The Chicago region - which includes lucky us - was the only one to rise today, as falling oil prices are causing a general downward trend.

Here’s the explanation from Tom Kloza, chief oil analyst from the Oil Price Information Service:

I think it’s a combination of a few things. Some of the Great Lakes refineries were down for Autumn maintenance, and most of the Gulf Coast produced gasoline headed toward the supply-starved southeast. So, the Chicago market and to some extent the upper Midwest, was the Peter from which the market borrowed to pay Paul.
Suspect it will be short term - spot prices for Chicago gasoline can’t remain 60cts gal above futures or Gulf Coast prices for long, or else engineers may figure out how to construct a land barge.

In lieu of a land barge, expect either a brief uptick in prices locally or at least a stalling of the downtick. Don’t kill the messenger…

Entry Filed under: Fuel price musings