Michigan has among the Highest Gasoline Prices Today

In spite of the slight fall in Michigan’s current gasoline prices, the state is still experiencing¬† relatively high fuel costs compared to the nation as a whole.

The AAA Daily Fuel Gauge Report shows that the average gas price in Michigan is $3.98 per gallon, a rate that is lower by six cents compared to the past week.

Michigan, with the fourth highest average gas price today throughout the country next to Hawaii, California and Illinois, has been heavily impacted from last month’s shutdown of the Enbridge pipeline. This Wisconsin-based pipeline was shut down after a burst section of pipe caused crude oil to be spilled in a vacant field. Unplanned downtime at other regional refineries added to the perfect storm of problems, leading to a 39-cent increase in only a week. Having only recently been reopened last week, it will take some time for the market to recover from the supply shock.

Detroit’s gas price today is lower by 4 cents versus last week, at $4 a gallon. The average in the past month was $3.57 per gallon. Michigan’s prices at the pump will not immediately come down, said analysts.

Prices will fall when oil flows back to refineries, therefore much is dependent on the crude price per barrel. But, now that oil prices have recently fallen, with a recent price of $92.82 per barrel, many expect that the gasoline prices will also lower in the short term.

Although residents of Michigan are seeing some relief in the current gasoline prices, the average in the entire country has moved up from the past week’s $3.61 to $3.69 per gallon, according to the Daily Fuel Gauge report of the AAA.

Another factor that is possibly causing the higher gasoline prices in the Midwest is the West Shore pipeline’s temporary closing following a similar leak as the Enbridge incident. Some of the fuel from the Wisconsin pipeline flows to Green Bay that eventually reaches the Upper Peninsula’s gasoline stations, according to Jennifer Brumbach of the OPIS.

The tensions in the Middle East, lower North Sea output and Chevron’s refinery shutdown also add to the problems for gasoline prices, said analysts.

If the crude price per barrel increases and if demand keeps on rising, gasoline prices may not dip until the end of this year, said Carl Larry of Oil Outlooks and Opinions trade paper.

Stephen Schork of the Schork Group believes otherwise, saying that since capacity is coming back online, some weakness is removed from the markets in the Midwest including a transitioning market in Detroit, Michigan and the upper region of the Midwest.

By: Chris Termeer

Chris Termeer

Chris Termeer is an oil and gas consultant, industry commentator and analyst. His book, Fundamentals of Investing in Oil and Gas provides a comprehensive overview of all aspects of the oil and gas industry, including exploration, drilling, production, storage, transportation and refining, to name but a few.

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