Wednesday, March 18, 2015

Corner station in No Man's Land as oil retreats

Last week, the story was gas prices inch up in my old neighborhood as oil falls.
Yesterday, the corner station returned to $2.39 for regular and was selling mid-grade for $2.59.  Looks like that 20 cent premium is here to stay.  In contrast, the three stations down the corner only raised their prices to $2.19 with mid-grade at $2.29.  I filled up Dez as soon as I saw that.
Yesterday, as OilPrice.Net shows, WTI closed at $48.29 while Brent ended trading at $56.39.  Both are close to their lows for the past month and in trading bands $5 below where they were last report.
This week, the news is that gas prices fell as oil hit multi-year lows, at least in my old neighborhood.  Yesterday, the three stations down the street from the corner station in my old neighborhood lowered their price from $2.19 to $2.17.  Meanwhile, the corner station is camped out in No Man's Land by selling regular at $2.49.  They raised their price while their competition lowered theirs.  This will probably not end well for them, as they are 21 cents above the Detroit average of $2.28 at GasBuddy.  In contrast, their competition is a dime lower, exactly where they usually are.  That's why I filled up Ruby at one of them.

Meanwhile, OilPrice.Net lists yesterday's close for WTI at $43.46, a six-year low for the commodity.  That makes the price rise since January look like a dead-cat bounce.  Brent also fell to $53.43, not as low as it was in January, but $10 off of where it was a month ago.  Not a dead-cat bounce, but close.

As for the future, I'll repeat what I wrote last month: "As long as oil stays at these levels, Detroit and Michigan averages over $2.50 by the end of the month seem unlikely."

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