Two weeks ago, I wrote the following after the jump in Driving update for March 2016: Dez plus bonus gas price update.
When I last posted about gas prices, I wrote that the annual gas price rise had begun. Then, the stations in my old neighborhood were selling regular for $1.66. I decided to wait, as I thought gas should have been cheaper and thought it might even go down. The next week proved me right, as I found those same stations selling regular for $1.50. I filled up. Two weeks later, which was last week, they were selling the same grade for $1.73. I decided I didn't need gas enough to buy and waited. This week, the price went up to $1.78. Given what the local price environment looked like, I decided it was a reasonable price for the time of year and filled up my tank again.The metro Detroit average has only increased by a penny to $1.97, but the local price in my old neighborhood has continued to creep up. Yesterday, the two stations down the street from the corner station were both selling regular at $1.90. That's seven cents lower than the average, but thirteen cents more than two weeks ago. However, both were a quarter below the corner station, which was advertising regular for $2.15. Welcome to No Mans Land! Meanwhile, the national average rose to $2.05. Expect the seasonal gas price rise to continue.
Was I right to think so? GasBuddy says yes, as the Detroit average has been $1.96 all week. The metro average may not be rising, but the national average is moving north of $1.98.
That's the bad news. The good news is that gas is 59 cents lower than it was this time last year.
While the retail environment is pushing the price a the pump up, the wholesale environment is not. Oil-Price.Net shows yesterday's closes for WTI at $38.28 and Brent at $39.14, about $2 less than the $40.20 and $41.54 of two weeks ago. Also, RBOB fell more than a penny to $1.45. Those trends should moderate the rate of increase.
Follow over the jump for how falling oil prices fit into the larger market picture.
The lower oil prices, which fell 3% yesterday, did not dampen the stock market. Reuters reported Dollar slides after Yellen speech; S&P at 2016 high.
The U.S. dollar dropped sharply and stocks on Wall Street ended at 2016 highs after Federal Reserve Chair Janet Yellen said the Fed should proceed "cautiously" in deciding when to raise interest rates.Stocks going up as oil goes down? That's actually normal and indicates that oil isn't too cheap. Stocks going up as the dollar drops? Also very normal, reflecting both moving from one investment to another and a sign that the economy should improve as manufacturers can export more. Oil going down as the dollar falls? That's very unusual. Normally, a lower dollar means more expensive oil. I still expect a rise in oil prices if the other trends indicate an improving economy. Stay tuned.
The Dow Jones industrial average .DJI rose 97.72 points, or 0.56 percent, to 17,633.11, the S&P 500 .SPX gained 17.96 points, or 0.88 percent, to 2,055.01 and the Nasdaq Composite .IXIC added 79.84 points, or 1.67 percent, to 4,846.62.
The U.S. dollar hit its lowest level against the euro in over a week and fell the most in two weeks against other major currencies after Yellen's remarks.