Houston, TX (PressExposure) May 06, 2009 -- GasPredictor.com, a Web site and e-mail newsletter that provides short-term forecasts of retail gasoline prices, is predicting stunning price increases in Houston within the next day or two. Their official forecast calls for prices as high as $1.95 (up from today's $1.89), but unofficially, the GasPredictor team is betting on prices between $2.05 and $2.10 by tomorrow afternoon.
Earlier this week, GasPredictor.com was calling for large price increases in just about every city in the contiguous United States, and those predictions have come true just about everywhere. The only exception among major cities is Houston, Texas. The GasPredictor team members are confident that it's only a matter of time, and not much time.
It's hard to argue with their predictions. Since they began publishing their Gas Predictor Newsletter in November, 2008, their predictions have been correct 100% of the time for four cities, and 98% of the time for Atlanta, GA.
Chuck Bonner, lead analyst at GasPredictor.com, describes the mathematical formula that leads to the prediction of a price "pop" in Houston: "We look at the prices of near-term gasoline futures and at the current retail price in each city. We consider both what level are the prices at now, and what direction they have been moving in the past few days. This gives us a number that we call 'pressure,' which can be positive or negative. Today, the positive pressure in Houston is about 0.62, which is the highest we have ever calculated there." When asked for the scale on which this pressure is measured, Bonner simply said, "It has no scale. It's just a number, and it can go as high as it can go. We have seen pressures in other cities as high as 1.14, but there's no reason it couldn't go higher than that. Probability favors low values, and we consider anything greater than 0.3 to be strong."
Bonner says that gasoline futures have risen by around twenty cents per gallon in the past five days, yet retail prices in Houston have remained steady. Bonner states, "Houston's gasoline retailers may be stubborn, but they're not stupid. They'll have to raise their prices soon, just to catch up with the rise in futures, but they almost certainly won't raise them by twenty cents in one day. Still, they might have to raise them by five or ten cents a day for several days in a row, just as happened in Chicago."
It is important to note that GasPredictor.com bases its predictions on the second-lowest retail prices in each city they monitor, so their reported prices might not match those reported in other sources. As Bonner says, "Most people buy the most gas at the second-lowest available prices. That's where the retailers tend to cluster, and that's the only value for which we get reliable, meaningful predictions."
GasPredictor.com currently publishes its forecasts for the 48 contiguous United States as a whole, and for each of five cities, including Houston. They plan to extend their preditions into a total of a dozen cities across the U.S. by 2010, and to begin publishing predictions for the price of diesel fuel as well.
Annual and quarterly subscriptions to the Gas Predictor email newsletter are available in limited numbers exclusively through the Web site, at [http://www.gaspredictor.com/SubscribeMain.htm].