Wednesday, March 25, 2015

Gas and oil move up, but still relatively low

Last week, the story was Corner station in No Man's Land as oil retreats.
[G]as 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.
This week, I didn't have to fill up either of our cars, but I had to run an errand for class in my old neighborhood, so I checked in.  The corner station had dropped its price, but only five cents to $2.44 for regular.  Meanwhile, the three stations down the street raised theirs to $2.39 for regular.  According to GasBuddy, these prices are just a touch higher than usual for the neighborhood, as they were only three cents below the Detroit average of $2.42 instead of a dime lower.  Prices may or may not drop, but they shouldn't increase over the next week unless oil moves up sharply.

OilPrice.Net shows that might be happening.  West Texas Intermediate (WTI) closed up today $1.70 to $49.21, while Brent jumped up $1.37 to $56.48.  That's five dollars higher than last week but still nowhere near as high as they were this time last week.  Once again, I'm going to be a good environmentalist and recycle.
As for the future, I'll repeat what I wrote last month week: "As long as oil stays at these levels, Detroit and Michigan averages over $2.50 by the end of the month seem unlikely."
Instead, a different prediction looks more likely, one I made in December: "Expect prices at the pump to remain below $3.00 until at least March, if not later."  That one is almost a lock.

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