It looks like the question last asked by the limbo dancing kitty in A fifth drop in gas prices has been answered and it's exactly where I predicted it would be in Gas falls three times in one week.
I could see prices settling at $3.35 between now and Dream Cruise, but lower than that would surprise me.I confirmed it in A fifth drop in gas prices.
The Detroit average is...just above $3.46, but is showing signs of slowing its decrease, as it hit $3.47 yesterday followed by a flattening out of the curve of a steady descent of 42 cents in 30 days. Given the shape of the curve, a bottom of $3.35 for the neighborhood stations looks good, as that would be a dime cheaper than the metro average, the normal spread.Yesterday morning, the three stations down the street lowered their prices from $3.38 to $3.35. At the same time, the corner station raised its price to $3.55. Once again, the corner station jumps over the limbo bar. By last night, the corner station had dropped regular a penny to $3.54, a position in No Man's Land that it still occupies. Meanwhile, the three stations down the street are 19 cents cheaper and all the outlets within two miles to the north and west are undercutting its price, advertising regular between $3.37 and $3.45. Unless the price environment changes dramatically to the upside, the corner station will drop its price soon.
Speaking of the price environment, that's what makes me confident that the answer to "how low can you go" is $3.35 for now. Follow over the jump for the latest from GasBuddy and Reuters.
GasBuddy shows that both the national and Detroit averages have finally stopped falling. The national average bounced off a floor of $3.50 a couple of days ago and has now risen slightly to $3.51. The mean Detroit price is sliding along a floor just above $3.42. The three stations down the street could drop a few more cents to $3.33 or $3.32 early next week, but the rising national average makes me doubt it.
On the other hand, commodity futures indicates that the slide could resume next week. Reuters reports Oil prices tumble on oversupply, weak demand.
Brent and U.S. crude futures tumbled on Friday to the lowest settlement prices in months, as oversupply in the Atlantic basin and low demand outweighed worries over political tensions in the Middle East, North Africa and Ukraine.Looks like the traders are suffering from fear premium fatigue. As a result, RBOB is more than a dime cheaper than last week, when it was $2.8653 a gallon. If this continues, I might have to reset the price floor at $3.29, ten cents below the seasonal low a year ago. Should that happen, I will no longer be surprised.
Oil prices ended the week down more than 3 percent, as forecasts for a supply glut in West African and European markets dragged Brent below $105 a barrel and U.S. crude below $98.
Brent crude slid $1.18 to settle at $104.84 a barrel, its lowest settlement since April 2.
U.S. crude fell 29 cents to settle at $97.88 a barrel, the lowest settlement since Feb. 6. U.S. crude notched its biggest weekly decline since January, almost 4.5 percent.
U.S. RBOB gasoline prices led the complex lower, settling at $2.7443 a gallon, then fell more in post-settlement trading, hitting the lowest since February.
Before I finish, I want to tie up one loose end from Gas falls three times in one week.
The corner station did something odd. It was advertising the next grade at 30 cents higher instead of 15--that or it's advertising the price of the highest grade; I couldn't tell from two blocks away. I'll double-check that later.It was advertising midgrade 30 cents higher at the time. When I posted A fifth drop in gas prices, midgrade was once again only 15 cents higher than regular at the corner station. I'm glad that was a one-time event instead of a new pricing trend.