Here's where the combatants in the local gas price war stood when I wrote Fear premium returns as U.S. bombs Sith Jihad.
[The corner station] won't match them at $3.32, as all of the stations down the street raised their price to $3.45 today. It isn't yet matching them at that price either, as it is still at $3.65.That was last Friday. Monday, the corner station matched the rest at $3.45, which is where all the neighborhood stations have remained since. The fear premium stalled out, but prices still haven't returned to where they were a week ago.
So, are the neighborhood outlets overpriced, as they were last week when the Detroit average was $3.41, and are they going to go down soon? To answer that question, I defer to A HREF="http://www.gasbuddy.com/gb_retail_price_chart.aspx?time=1">GasBuddy
, which shows that the national average is retreating from a high of $3.47 a few days ago and is now at $3.46. The Detroit average is higher, but starting to show signs of easing as well. The metro area mean continued rising from last Friday's $3.41 to $3.50 on Sunday, where it remained except for a brief bump to $3.51 yesterday then a return to $3.50 today. Based on the usual pattern of the local stations being up to a dime below the Detroit average, they are a bit overpriced. They should be at $3.41 or $3.40.
That's not the only indicator that prices should be lower. Follow over the jump for the latest from the Wall Street Journal on the prices of oil and wholesale gasoline.
The headline is telling: Oil Prices Keep Tumbling to Multi-Month Lows.
A Sluggish Demand Outlook Weighs on PricesGas prices should drop. Unless something dramatic happens to either make the fear premium return or reduce supplies, I expect gas to resume falling. However, even though wholesale prices are even weaker than when gas was $3.32, I don't expect retail prices to test that floor again until after Labor Day. Not only is that particular last blast of summer going to increase demand and put a floor under prices, this week is Dream Cruise. That's a captive customer base that will keep demand up through the weekend. It will also add to the video posts like the one earlier today both this week and next.
NEW YORK—Oil prices skidded Thursday, hitting multi-month lows on a sluggish demand outlook.
Light, sweet oil for September delivery fell $2.01, or 2.1%, to $95.58 a barrel, the lowest price since Jan. 21.
Brent, the global benchmark, settled down $2.27, or 2.2%, at $102.01 a barrel, the lowest price since June 26, 2013. It was the largest one-day decline since January. The September contract expired at settlement Thursday. The more-actively traded October contract settled down $2.99, or 2.9%, at $102.07 a barrel.
"The market's just free-falling," said Gene McGillian, broker and analyst at Tradition Energy in Stamford, Conn.
Front-month September reformulated gasoline blendstock, or RBOB, fell 8.78 cents, or 3.2%, at $2.6666 a gallon, the lowest price since Feb. 5. September diesel fell 8.24 cents, or 2.8%, to $2.8195 a barrel, the lowest settlement since May 31, 2013.