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 dovGasoline 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/wnward 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/