I described the price action and made a prediction in The fear premium strikes again over Syria.
Yesterday morning, the corner station jacked up its price to $3.79, while the three stations down the street were still selling regular at $3.45. This evening, they followed the corner station with prices of $3.78. The corner station took them with it. I was right not only to fill up my car, but to fuel up my wife's. Of course, the saber rattling over Syria's use of chemical weapons helped push things along. The fear premium strikes again.Instead of prices continuing to increase, they actually declined. Yesterday, the three stations down the block dropped their prices to $3.69 pulling the corner station down to $3.75. Today, the corner station joined them at $3.69. It turns out that the local stations were merely reflecting the price of Brent crude, which fell to $115.16 from its peak yesterday of $116.71, a drop of $1.45 and 1.26%. According to Econobrowser, that translates to a national average price at the pump of $3.72. The local price has merely adjusted to that level.
Speaking of the fear premium, Econobrower lists the closing price of Brent crude yesterday at $116.61, a jump of $2.25 and 1.93% from the day before. That translates to a national average price of $3.75. That's well above the national average price of $3.59, the Detroit average of $3.62, and even the Michigan average of $3.67. Expect prices to keep rising, although I think the local gas is fairly priced given the current price of oil. That written, the fear premium can continue to go up if tensions increase and more countries get involved in Syria's civil war. Stay tuned.
While the neighborhood stations are well above the current national average of $3.62, they are right at the Detroit average of $3.69 and below the Michigan average of $3.74, which appears to already be declining. While I'm confident that the national average will continue to rise for at least the next week, whatever happens locally depends on the price of oil, and that depends on what happens with Syria. Stay tuned.