xcel
08-22-2006, 06:46 PM
Motorists woke up Monday morning to the cheapest gasoline in almost two months. (http://www.detnews.com/apps/pbcs.dll/article?AID=/20060822/METRO05/608220338/1148/AUTO01)
Sofia Kosmetatos - The Detroit News - August 21, 2006
http://www.cleanmpg.com/photos/data/501/Less_then_3_00_Gas_Prices.jpg
$3.00 + per a gallon a thing of the past or just a reprieve?
The price of unleaded regular at Future Fuels in Dearborn Heights was among the lowest to be found in Metro Detroit on Monday. Gas prices are falling nationwide, and may continue to do so through Labor Day.
Enjoy cheaper gasoline while you can, Metro Detroiters, because no one can say for sure if it will stay that way for very long.
Motorists woke up Monday morning to the cheapest gasoline in almost two months, since summer officially began in June. The average for regular gasoline stood at $2.86 a gallon, but stations throughout Metro Detroit were charging less, at least one as low as $2.69. Numerous others were asking $2.72.
"It makes a difference," said Irene Cowley of Novi as she filled up at a station on Michigan Avenue in Dearborn, where a gallon of unleaded was $2.72.
But, the Ford Motor Co. engineer added, "I don't see it going anywhere but up."
While some analysts agree, saying this price dip is only temporary, others predict it will hang around awhile.
But no one can say for sure where gas prices will head, given there are so many factors that drive the price of oil:
The Labor Day holiday could cause a slight bump up, as drivers take to the road for their last summer hurrah. But the end of summer driving season could bring it right back down.
If demand for gasoline stays high, so will the prices, but if a slowing worldwide economy shaves that demand, then prices could retreat even further.
The longer the hurricane season is hurricane-free, the better chance for lower gas prices. But a big storm that disrupts the gulf's oil supply, or even the threat of a severe hurricane, could send them higher.
If the truce holds between Israel and Lebanon, that would be good news for motorists. But if violence erupts again, that would affect prices.
"The single biggest driver in the price of gasoline at the pump is crude oil," said Sara Banaszak, senior economist with the American Petroleum Institute.
World events already were pushing oil prices up again Monday. Unrest over the Iranian nuclear weapons situation sent prices to $72.45 a barrel, up from a close of $71.14 on Friday.
Threats didn't appear
Threats that never appeared are what sent oil and gas prices down in the past week, AAA Michigan spokesman Jim Rink said.
"What we've been witnessing is prices kept getting higher and higher in response to a number of possible threats … things that never materialized," Rink said. Once the threats went away, prices reacted to market fundamentals, declining amid a healthy supply, he said.
Those threats included the continued fighting between Israel and Lebanon and the pipeline erosion in Prudhoe Bay, Alaska, that could have shut down the field and reduced domestic oil output by 7.5 percent.
But last week, Israel and Lebanon came to a truce, albeit fragile, and BP PLC said it would have to completely shut down Prudhoe Bay.
Oil prices hit a record high of $78.40 per barrel on July 14, two days after fighting began in Lebanon. Fears that the conflict would spread to other parts of the Middle East and restrict oil supplies had some analysts fearing the price per barrel would keep rising to above $80, and in turn keep driving up the cost of gasoline.
Are lower prices on the way?
But $80 a barrel never happened.
And some analysts now are forecasting even lower prices through Labor Day, barring unforeseen natural disasters or Middle East conflicts that affect supply.
One optimist is Michael Burdette, an oil market analyst for the Energy Information Administration.
"Looking at gasoline prices at the refinery level, we've seen them go down almost 40 cents in the month of August, which implies that gasoline prices in the next few weeks are going to head down significantly further," Burdette said.
In the next two weeks, drivers could see another 9-cent drop in prices at the pump, he said, even through the Labor Day holiday.
That would suit Al and Nancy Bentre of South Lyon just fine. They're tired of spending more than $50 to gas up their white Ford Explorer.
Like many Metro Detroiters, the couple changed their driving habits to conserve their gasoline use as prices rose. "We were trying to do things all at one time," instead of making multiple trips to the store, Al Bentre said.
With their granddaughters in tow and a couple of day trips planned this week, a price of $2.72 was a welcome sight.
Ditto for Dionne Brantley, a Detroit schoolteacher whose husband drives to Flint for work in a gas-guzzling Tahoe.
"We have noticed a difference in the price," she said, as she prepared to fill up her Cadillac CTS, which, thankfully, gets better mileage than the Tahoe. But even at $2.72, gas still costs more than in previous years, she said.
"Prices are just high, period," she said. "Regardless of what car you have, it really doesn't matter."
Sofia Kosmetatos - The Detroit News - August 21, 2006
http://www.cleanmpg.com/photos/data/501/Less_then_3_00_Gas_Prices.jpg
$3.00 + per a gallon a thing of the past or just a reprieve?
The price of unleaded regular at Future Fuels in Dearborn Heights was among the lowest to be found in Metro Detroit on Monday. Gas prices are falling nationwide, and may continue to do so through Labor Day.
Enjoy cheaper gasoline while you can, Metro Detroiters, because no one can say for sure if it will stay that way for very long.
Motorists woke up Monday morning to the cheapest gasoline in almost two months, since summer officially began in June. The average for regular gasoline stood at $2.86 a gallon, but stations throughout Metro Detroit were charging less, at least one as low as $2.69. Numerous others were asking $2.72.
"It makes a difference," said Irene Cowley of Novi as she filled up at a station on Michigan Avenue in Dearborn, where a gallon of unleaded was $2.72.
But, the Ford Motor Co. engineer added, "I don't see it going anywhere but up."
While some analysts agree, saying this price dip is only temporary, others predict it will hang around awhile.
But no one can say for sure where gas prices will head, given there are so many factors that drive the price of oil:
The Labor Day holiday could cause a slight bump up, as drivers take to the road for their last summer hurrah. But the end of summer driving season could bring it right back down.
If demand for gasoline stays high, so will the prices, but if a slowing worldwide economy shaves that demand, then prices could retreat even further.
The longer the hurricane season is hurricane-free, the better chance for lower gas prices. But a big storm that disrupts the gulf's oil supply, or even the threat of a severe hurricane, could send them higher.
If the truce holds between Israel and Lebanon, that would be good news for motorists. But if violence erupts again, that would affect prices.
"The single biggest driver in the price of gasoline at the pump is crude oil," said Sara Banaszak, senior economist with the American Petroleum Institute.
World events already were pushing oil prices up again Monday. Unrest over the Iranian nuclear weapons situation sent prices to $72.45 a barrel, up from a close of $71.14 on Friday.
Threats didn't appear
Threats that never appeared are what sent oil and gas prices down in the past week, AAA Michigan spokesman Jim Rink said.
"What we've been witnessing is prices kept getting higher and higher in response to a number of possible threats … things that never materialized," Rink said. Once the threats went away, prices reacted to market fundamentals, declining amid a healthy supply, he said.
Those threats included the continued fighting between Israel and Lebanon and the pipeline erosion in Prudhoe Bay, Alaska, that could have shut down the field and reduced domestic oil output by 7.5 percent.
But last week, Israel and Lebanon came to a truce, albeit fragile, and BP PLC said it would have to completely shut down Prudhoe Bay.
Oil prices hit a record high of $78.40 per barrel on July 14, two days after fighting began in Lebanon. Fears that the conflict would spread to other parts of the Middle East and restrict oil supplies had some analysts fearing the price per barrel would keep rising to above $80, and in turn keep driving up the cost of gasoline.
Are lower prices on the way?
But $80 a barrel never happened.
And some analysts now are forecasting even lower prices through Labor Day, barring unforeseen natural disasters or Middle East conflicts that affect supply.
One optimist is Michael Burdette, an oil market analyst for the Energy Information Administration.
"Looking at gasoline prices at the refinery level, we've seen them go down almost 40 cents in the month of August, which implies that gasoline prices in the next few weeks are going to head down significantly further," Burdette said.
In the next two weeks, drivers could see another 9-cent drop in prices at the pump, he said, even through the Labor Day holiday.
That would suit Al and Nancy Bentre of South Lyon just fine. They're tired of spending more than $50 to gas up their white Ford Explorer.
Like many Metro Detroiters, the couple changed their driving habits to conserve their gasoline use as prices rose. "We were trying to do things all at one time," instead of making multiple trips to the store, Al Bentre said.
With their granddaughters in tow and a couple of day trips planned this week, a price of $2.72 was a welcome sight.
Ditto for Dionne Brantley, a Detroit schoolteacher whose husband drives to Flint for work in a gas-guzzling Tahoe.
"We have noticed a difference in the price," she said, as she prepared to fill up her Cadillac CTS, which, thankfully, gets better mileage than the Tahoe. But even at $2.72, gas still costs more than in previous years, she said.
"Prices are just high, period," she said. "Regardless of what car you have, it really doesn't matter."