A day after the Memorial Day weekend, gasoline prices seemed to be in retreat, down 21 cents from a week ago to $4.61 a gallon on news that there could be a U.S.-Iran agreement, with Michigan — specifically — showing one of the biggest price drops by state.
At the same time, optimism for an agreement may, by Tuesday, May 26, have started to fall away as America launched more military strikes against Iran and Israel promised to intensify attacks on Hezbollah in Lebanon.
In Michigan, gas was already down on Monday, with drivers paying $4.63 a gallon for regular unleaded, which is more than 63 cents more than it was a month ago, and $1.42 more than a year ago, according to AAA, which tracks prices.
“Michigan drivers are getting some relief at the pump,” Adrienne Woodland, AAA spokeswoman, said. “While the recent drop is welcome, continued volatility and higher crude oil prices could quickly push pump prices higher again.”
U.S. forces on Monday hit more targets in southern Iran that news reports said included missile launch sites and boats seeking to lay mines as Iranian leaders were in talks for a possible deal to end the three-month-old war.
Iran called the strikes a “flagrant violation” of the ceasefire and vowed to “leave no act of aggression unanswered,” a threat that could cause the peace efforts to unravel and upend the recent market optimism.
Still, prices on Tuesday dropped another 2 cents a gallon, although the averages tend to lag shifts by a day or two. Diesel is selling for $6 a gallon, down from a record high on May 14 of $6.21.
Across Michigan, the most expensive gas price averages were in Jackson, $4.74 a gallon; Grand Rapids, $4.67; and Ann Arbor, $4.67; the lowest averages were in Marquette, $4.36; Lansing, $4.50; and Flint, $4.50.
Michigan’s gasoline average is still higher than the national average of $4.49.
Motorists are now paying about $69 for a full 15-gallon tank of gasoline. Oil, which is the key determinant in the price of gasoline, was trading on Tuesday just under $100 a barrel.
GasBuddy, which also tracks prices but uses a different calculation, found that gas price averages fell in 40 states as a result, mostly, of falling global oil prices, which dropped based on hope that a peace deal was close at hand, but then rose again.
“In many states, that drop created breathing room,” GasBuddy’s Patrick De Haan, a petroleum analyst, said. “For now, motorists may continue to see some relief, but it remains too early to know how long the decline will last.”
Reuters on Monday reported Secretary of State Marco Rubio had said America wanted to give diplomacy a chance before considering “another way,” and that there was a “pretty solid thing on the table” to reopen the Strait of Hormuz, the waterway that is blocked, stopping the flow of a fifth of the world’s oil.
But the chance of a deal may give way to the new attacks.
By GasBuddy’s calculations, the average of 10% of the most expensive stations in the country averaged $5.86 per gallon, while the bottom 10% averaged $3.77 per gallon. The state with the lowest average price was Indiana, $3.90 a gallon, while the highest was California at $6.07 a gallon.
Michigan, according to GasBuddy, was among the five states with the biggest weekly gasoline price drops in the nation, about 18 cents. New Mexico was down 23 cents a gallon; Colorado, 19 cents; Indiana, also 18 cents; and Florida, 17 cents.
“This is the most volatile summer at the pump in years, and the Strait of Hormuz closure is at the center of it,” De Haan has said. “Americans are going to pay billions more to get where they’re going this summer, and even after the Strait reopens, it could take a year or more for gas prices to fully recover.”
Contact Frank Witsil: 313-222-5022 or fwitsil@freepress.com
This article originally appeared on Detroit Free Press: Michigan gas prices fall as U.S. launches new strikes on Iran
Reporting by Frank Witsil, Detroit Free Press / Detroit Free Press
USA TODAY Network via Reuters Connect
