When I wrote "I don't expect any more price drops this week" in The parachute ride begins with fall gas prices, I was premature. The same day I posted that, all four neighborhood stations, including the one on the corner, lowered their price for regular to $3.41 by nightfall. Based on GasBuddy's Detroit data, that shouldn't have happened yesterday, when the Detroit average was $3.54. In fact, it's still a bit ahead of the curve for today, as the Detroit average is just above $3.52. By tomorrow, it should be about right so long as the average price for the metro area keeps dropping.
While the bad news is that I was wrong, although I was wrong in the way I'd like to be, the good news is that the neighborhood outlets are now at the national average of $3.41 and local prices are below where they were last year both before and after the price drop. Before yesterday, when the stations were at $3.45, they were 14 cents below where they were a year before when they were selling regular for $3.59. Should the neighborhood stations remain at $3.41 through tomorrow, they'll still be 14 cents lower than they were on the same day last year when the local price was $3.55. I'd post Professor Farnsworth except that I'm saving that for when prices drop below $3.32 and that there is better news this week that I'm saving him for.
As for why I was wrong, it was probably because I didn't look at wholesale commodity prices yesterday and the local outlets were reacting to falling prices on that front. Follow over the jump for the latest on those.
Here's what the Wall Street Journal reported a couple of hours ago in Oil Prices Fall Amid Concerns About Demand.
Brent on Track to Settle at Fresh 2014 LowThe oil prices are a lot lower than the ones from the Reuters article I quoted in A great day for business as usual.
NEW YORK—Oil prices declined Friday as market participants continued to focus on weak demand, though prices bounced slightly on renewed geopolitical concerns in overnight trading.
Light, sweet crude for October delivery recently fell 19 cents, or 0.2%, to $92.64 a barrel on the New York Mercantile Exchange.
Brent fell 44 cents, or 0.5%, to $97.64 a barrel on ICE Futures Europe, on track to settle at a fresh 2014 low.
Front-month October reformulated gasoline blendstock, or RBOB, ticked up 0.4 cent at $2.5245 a gallon. October diesel slid 0.87 cent, or 0.3%, to $2.7474 a gallon.
Oil prices were steadier for the moment after their long decline. Brent crude inched up 7 cents to $102.57 a barrel, while U.S. crude dipped 3 cents to $93.83 a barrel.WTI is more than a dollar lower and Brent, which drives most oil prices, is nearly five dollars cheaper than it was two weeks ago. As for RBOB, I last mentioned that in Fear premium a dead cat bounce as price falls three times in five days when it was $2.7014 and the nearest outlets were selling gas for $3.35. It's now 18 cents cheaper. No wonder the local price at the pump fell. That will teach me to make a prediction before checking all sources of information.
As for next week, I wouldn't be surprised if gas prices fall again to between $3.35 and $3.39. I might even be right about the prediction I told my students last week, that gas could be as low as $3.29 by the end of the month. Stay tuned.