As Michigan gas prices go up, analysts mixed on whether they will hit $5 a gallon again

Frank Witsil, Detroit Free Press
Updated ·3 min read
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Gas prices in Michigan went up Monday to an average of $3.62 a gallon for regular unleaded, 10 cents more than a week ago, after major oil producers announced cuts to oil production and for the rest of the year, according to auto club AAA.

The national average for gasoline was $3.60 a gallon.

AAA predicted that prices could continue to rise, but whether they will top last year's high of more than $5 a gallon is unclear. One gasoline industry analyst has predicted that $5 a gallon is possible this summer, but another said it is an "extremely long shot" that prices will go that high.

"Prices are being pulled up not only due to continued increases in demand as temperatures warm, but also pressure from oil prices, which have risen over 20% in the last month," said Patrick De Haan, head of petroleum analysis at GasBuddy. "Expect the upward trend to continue through much of the rest of spring, but once the transition to summer gasoline and refinery maintenance are behind us, April and May jumps could bring June slumps."

The price at the pump, AAA said, is now 7 cents more than last month, but still 34 cents less than a year ago, with motorists paying an average of $54 for a full, 15-gallon tank of gasoline, about $24-a-tank less from 2022's highest price last June.

Oil production cuts

Earlier this month, Saudi Arabia and other major oil producers announced oil production cuts of up to 1.15 million barrels per day from May until the end of the year, a move that industry experts said was likely to raise gas prices in the United States and worldwide.

AAA said that could mean gasoline at more than $4 a gallon during the summer.

The United States has called on Saudi Arabia and other allies to increase oil production as it seeks to lower prices and squeeze Russia’s finances.

Higher oil prices, the Associated Press reported, also would help fill Russian President Vladimir Putin’s coffers as his country wages war on Ukraine and would force Americans and others to pay even more at the pump amid worldwide inflation.

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Gas demand up slightly

Gas demand increased slightly from 9.15 to 9.3 million barrels a day, according to new data from the Energy Information Administration. Meanwhile, total domestic gasoline stocks decreased substantially by 4.1 million barrels to 222.6 million barrels.

Increased demand amid tighter supply has contributed to pushing pump prices higher.

West Texas Intermediate, the global crude oil benchmark, decreased by 10 cents a barrel to settle at $80.61, at the close of Wednesday’s formal trading session. Oil prices declined slightly due to market concerns that a recession could occur this year, which could push oil demand and prices down.

Prices around the state

Compared with last week, metro Detroit’s average daily gas price went up. Metro Detroit’s average is $3.58 per gallon, about 9 cents more than last week’s.

Most expensive gas price averages

  • Marquette: $3.70

  • Jackson: $3.67

  • Saginaw: $3.67

Least expensive gas price averages

  • Metro Detroit: $3.58

  • Traverse City: $3.62

  • Ann Arbor: $3.64

Contact Frank Witsil: 313-222-5022 or fwitsil@freepress.com.

This article originally appeared on Detroit Free Press: As Michigan gas prices rise, will they go to $5 a gallon this summer?