Wednesday, March 11, 2015

Gas prices inch up in my old neighborhood as oil falls

It's been three weeks since I posted Corner station retreats after two Tuesdays in No Man's Land.  That and my passing through my old neighborhood and seeing that gas prices actually changed means it's time for another update.

Three weeks ago, "all the stations were selling regular at $2.15, including the one at the corner.  It's so boring it's remarkable."  Two weeks ago, the corner station raised its price to $3.29, while the rest were still at $2.15.  Last week, the corner station dropped regular to $2.29, but was now selling mid-grade at $2.49, 20 cents higher.  Unfortunately, all the stations down the street were closed and their signs were off, so I couldn't tell what their prices were.  Based on the stations around them, I guessed they were at $2.29, but decided until I actually saw their prices before posting.

That made it difficult to check the GasBuddy predictions quoted by WXYZ in Michigan gas prices on the rise posted two weeks ago.

Follow over the jump to see how these two-week-old predictions fared.

The first prediction was that the average price of gas in Michigan would shoot up 15 cents last week from $2.32 to $2.47 in a week.   Did that happen?  Not in my old neighborhood.  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.

I also did not see other stations on the circuit from home to one work site to home to a second work site that high.  Yesterday, I bought gas at $2.38 for Ruby in the same town that WXYZ taped their video two weeks ago.  No price rise there.

As for the best test of the prediction, GasBuddy's own averages, those were not as spectacular as anticipated.  Yes, the Michigan average jumped the day GasBuddy predicted, but only a little over a dime in a few days to $2.43, not all the way up to $2.47.  Then they stalled out, sliding down to $2.29 by yesterday.  Detroit jumped even less, from $2.22 to $2.32 over the same time period.  They went up a penny or two over the next week before falling to $2.23 yesterday.  Essentially no net price rise there, either.

As for the second prediction, gas prices averaging more than $2.60 in Michigan by the end of March, that's still possible, but it probably won't happen because of higher oil prices.  In fact, prices have been falling.  Three weeks ago, WTI closed at $53.53 while Brent broke through resistance to $62.53.  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.  As long as oil stays at these levels, Detroit and Michigan averages over $2.50 by the end of the month seem unlikely.

Stay tuned for a post marking the fourth anniversary of the fourth anniversary of the earthquake, tsunami, and meltdown at Fukushima.

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