Aside from a brief spike in prices two weeks ago, Michigan’s average statewide price for a gallon of regular gasoline has stayed below two dollars.
Monday, motorists in Detroit and Ypsilanti were paying less than $1.60 for a gallon of gas.
Michigan has the 11th lowest gasoline prices in the U.S.
Much of the sharp price drop at the pumps can be traced to the 60% dive in world crude oil prices since last summer. Crude oil that was once trading around $110 a barrel is now selling for less than 50 dollars.
Patrick DeHaan is an analyst with GasBuddy.com.
He says the sharp drop is being orchestrated by oil rich nations trying to stifle new oil production in the United States. Falling crude oil prices are having an effect. Oil workers in Texas, North Dakota and elsewhere are getting layoff notices and future exploration is down.
The beneficiaries have been motorists who are enjoying gas prices they haven’t seen since 2009.
But DeHaan says Michigan motorists should not expect to see prices at the pump fall significantly further.
“Michigan may actually have hit a bottom on about January 15,” says DeHaan, “The best gas prices…or the lowest prices may have already hit the pump.”
While he does not expect major changes on crude oil markets, DeHaan predicts other market forces will soon start putting pressure on gasoline prices to rise.
He expects Michigan’s statewide average price for regular gasoline will be back in the $2.50 range by May.
But others are not so sure that crude oil’s fall isn’t done just yet.
J. P Morgan is just one of several major banks slashing its crude oil forecast. Some expect the price may fall below $40 a barrel, as slowing demand and a glut of oil on the market continue to depress prices.