Gas prices dip, but may rise on announced cuts
State average down to $3.53 per gallon, national at $3.55
Michigan’s average gas prices came down 8 cents Monday to $3.53 a gallon, but could go higher after news from Saudi Arabia over the weekend that it is cutting how much oil it sends to the global economy to boost the sagging price of crude and will “do whatever is necessary” to stabilize the market.
Michigan drivers are still paying 10 cents more than this time last month, but $1.49 less than this time last year, according to AAA, which tracks prices nationwide. Nationally, the average price is $3.55 a gallon for regular unleaded gasoline.
Oil demand decreased from 9.43 to 9.1 million barrels a day. Lower demand has helped to cap increases in pump prices. Meanwhile, total domestic gasoline stocks dropped slightly to 216.1 million barrels, according to the Energy Information Administration.
West Texas Intermediate — a crude oil that serves as one of the main global oil benchmarks — decreased by $1.37 to settle at $68.09. Oil prices fell amid a strengthening dollar and growing market concern that global energy demand could slow due to reduced manufacturing activity in China, the world’s top crude oil importer, AAA said.
Saudi cuts oil production
At the same time, the Associated Press reported Sunday that Saudi Arabia’s new cut would “likely push up oil prices in the short term, but the impact after that would depend on whether Saudi Arabia decides to extend it,” according to Jorge Leon, a senior vice president of oil markets research at Rystad Energy.
“Gas is not going to become cheaper,” Leon said. “If anything, it will become marginally more expensive.”
Most expensive average gas prices in Michigan
Jackson: $3.57 h
Traverse City: $3.57 h
Marquette: $3.55. h
Least expensive average gas prices
Flint: $3.48 h
Lansing: $3.52 h
Grand Rapids: $3.52 h
Contact Frank Witsil: 313-222-5022 or fwitsil@freepress.com.