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Gas prices in Michigan are declining again, after rising an average of 11 cents last week. Sunday’s state average of $2.34 per gallon is 6 cents more than a week ago, yet remains less than the previous 2018-low of $2.42 per gallon, set in February.
“Despite the recent jump at the pump, Michigan drivers are saving almost $3 on a full tank of gas, compared to this time last year,” said Nancy Cain, spokesperson, AAA – The Auto Club Group. “Oil prices are beginning to increase, after OPEC announced a production cut agreement on Friday. Regardless, drivers should continue to enjoy low gas prices through the end of the year, unless oil prices suddenly spike.”
Click here to view AAA’s state and metro gas price averages
- Most expensive gas price averages: Marquette ($2.42), Ann Arbor ($2.38), and Jackson ($2.37)
- Least expensive gas price averages: Traverse City ($2.29), Flint ($2.32), and Benton Harbor ($2.33)
At the close of Friday’s formal trading session on the NYMEX, WTI increased $1.12 to settle at $52.61 per barrel. Oil prices rallied Friday after the Organization for Petroleum Exporting Countries (OPEC) announced that beginning in January 2019, the cartel – alongside non-OPEC members, including Russia – will reduce combined crude oil production by 1.2 million b/d. The cut will be in place for six months and will use October 2018 as a baseline, a time when OPEC and Russia had less crude output than in November. With the announcement, crude prices will likely increase in 2019 ahead of the higher demand driving season next summer. Increased crude prices will likely lead to higher gas prices, given that approximately 50 percent of the cost motorists pay at the pump is based on the cost of crude used to make gasoline.
In related news, EIA’s report for the week ending on November 30 revealed that crude inventories decreased by 7.3 million bbl after 10 weeks of consecutive growth. Total domestic crude inventories now sit at 443.2 million bbl, which is approximately 5 million bbl less than their level at this time last year. Declining inventories contributed to the increase in crude prices this week, and if the trend continues, prices could climb further.
