I dispensed Monday's price movements along with a dismal assessment of where I thought prices were going in the middle of Gas prices surprise me with their rise.
Yesterday morning the corner station shot its price up to $3.55. Meanwhile, the three stations down the street were still at $3.35. I'd seen this before and thought it would be another charge into No Man's Land by the corner station. Yesterday afternoon proved me wrong, as the rest of the neighborhood outlets followed it, raising their prices to $3.49. Prices might resume going down by next week, but 20 cents lower by the end of the month, only one week away, just doesn't look good any more. Just getting back down to $3.35 would be good news enough.I was a little more optimistic in the conclusion, writing "the neighborhood price will drop, although maybe not to $3.29 by the 30th." Tonight, I'm a bit more optimistic about meeting that goal by sometime next week, if not the 30th.
First, the corner station matched the rest at $3.49 on Tuesday. Next, it dropped its price to $3.45 on Wednesday morning, when I bought half a tank. I wasn't going to fill up, as I was fairly confident in the price dropping more before I needed more gas. I was right. By this evening, all the neighborhood stations had lowered their price to $3.39. Hey, a dime drop in two days, not next week--I'll take that!
Also in the good news department, prices have returned to being lower than this time last year, when they were $3.44. I'll take a nickel cheaper, too.
While the neighborhood prices are dropping, GasBuddy shows both the national and Detroit averages having been rising since the last update. The national average is now $3.34, a penny above the $3.33 on Monday. The Detroit average jumped even more from $3.39 to $3.43. Even with the increasing averages, the nearby stations are still overpriced relative to the local retail price environment, although they won't be if prices keep rising. Follow over the jump for news from Reuters that suggests they might.
Here's the headline that indicates rising short-term prices: Brent rebounds, U.S. crude gains as spread dips below $4.
Crude oil futures on both sides of the Atlantic settled higher on Wednesday, shrugging off early losses after a report showed an unexpected drawdown in crude oil inventories in the United States, the world's largest oil consumer.Financial Times supplied the missing RBOB price.
Mounting tensions in the Middle East and stronger-than-expected growth expectations for China also helped lift the international benchmark Brent price off a two-year low.
RBOB gasoline futures also got a lift from news of glitches at several U.S. refineries, including Valero's Meraux and Alon's Big Spring.
Brent crude for November delivery rose by 10 cents to settle at $96.95 a barrel, more than $1 higher than its session low of $95.60, its lowest since July 2012. It was down more than 6 percent for the month so far, the biggest monthly drop since April 2013.
U.S. crude rose by $1.24 to settle at $92.80 a barrel as the unexpected drawdown in weekly U.S. stocks offset earlier losses that had dragged it down to $91.12.
Nymex October RBOB gasoline blendstock climbed $0.0351, or 1.3 per cent, to $2.6638 a gallon on Wednesday after the appearance of the EIA’s weekly stock report.That's 8 cents higher than the $2.5857/gallon RBOB was selling for on Monday. I don't think that bodes well for $3.29 at the neighborhood stations by next week. On the other hand, my prediction that oil would bounce off a floor of $90/barrel is holding up remarkably well.