Archive for the ‘crude oil’ Tag

Gas prices below $2 a gallon for 1st time since ’09

Gasoline just keeps getting cheaper in Michigan, where the average pump price dropped Thursday to $1.97 a gallon — the lowest since March 2009.

Prices on New Year’s Day 2015 were down 13 cents in the past seven days, AAA Michigan said. Gas was 42% cheaper than it was one year ago, when the average price per gallon was $3.37.

“Gas prices continue to drop due to a significant decline in crude oil costs,” auto club spokeswoman Susan Hiltz said. “Crude oil represents about two-thirds of the cost of gasoline and is directly correlated with changes in gas prices.”

Dearborn-based AAA Michigan surveys fuel costs at 2,800 Michigan gas stations daily.

The latest price report marks a dramatic turnaround in gas prices. The statewide average peaked at $3.96 a gallon on June 16 before beginning a steady decline, according to the auto club. The national average also hit its 2014 high in June, reaching about $3.66 a gallon.

Nationwide, the average gas price was $2.24 a gallon Thursday, AAA said. It said drivers in the Midwest were paying the least for gas, while the most expensive prices in the contiguous 48 states were in the Northeast. Only Alaska at $3.09 and Hawaii at $3.53 a gallon averaged more than $3 this week.

If Michigan’s sub-$2 prices seem too good to last, they probably are, senior petroleum analyst Patrick DeHaan with GasBuddy told the Detroit Free Press. But even as prices make their expected rise, they probably will remain under $3 a gallon through 2015, he said.

“This may be getting as close to as good as it gets,” said DeHaan.

As read on: http://www.freep.com/story/news/local/michigan/2015/01/02/gas-prices-michigan/21178567/

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Michigan gas prices tumble to 10-month low

Gasoline prices in Michigan tumbled to their lowest point in about 10 months, and analysts expect prices to keep falling.

The average price of an unleaded gallon of gasoline fell to $3.27, down 13 cents from a week ago, according to AAA.

In metro Detroit, it was a similar story. The average price dropped 10 cents to $3.31 per gallon.

“Decreased demand, relatively lower crude prices and the cost savings associated with producing winter-blend fuel will likely keep downward pressure on the price for retail gasoline,” AAA Michigan said in a statement. “Barring any major disruptions in supply, drivers are expected to see some of the lowest autumn prices since 2010.”

Tom Kloza, chief oil analyst of GasBuddy.com, said prices are heading below the $3 mark.

“We’re really looking at wholesale prices that point to not just lower, but they’re dramatically lower,” Kloza said in an interview. “It’s coming fairly soon.”

In fact, stations in Greenville and Ionia have already reduced prices to below the $3 mark.

The lowest average price for a Michigan region is $3.14 in the Grand Rapids-Muskegon-Holland region. Marquette has the highest price at $3.49.

More than a dozen gas stations in metro Detroit are charging $3.07 or less, though most of those prices are cash only, according to GasBuddy.com.

Kloza said a confluence of factors are driving prices down.

The price of crude oil has been falling, hitting the $90 mark, and Bloomberg reported Thursday that betting on the future price of oil hit a 17-month low last week.

Refineries in the Midwest have also ended maintenance initiatives in recent weeks, increasing supplies and lowering prices further.

Political turmoil in the Middle East has had little effect on gas prices, economists noted.

“Geopolitical events remain front of mind for market watchers, but in recent months have not translated into upward pressure on global oil markets,” AAA said.

Kloza said the price of crude oil has fallen despite ISIS violence in Iraq and Syria, indicating that the market is not concerned that continued fighting will disrupt the flow of oil.

Still, he cautioned that $3 gasoline isn’t necessarily here to stay.

“I don’t think that becomes the new normal,” he said. “I do think that becomes a level that people will get used to in the offseason.”

Read more at: http://www.freep.com/story/money/business/michigan/2014/10/06/gasoline-prices-metro-detroit/16796443/