The U.S. Energy Department reduced its crude oil price forecast for 2011 as demand growth slips, non-OPEC production increases and stockpiles climb.
West Texas Intermediate oil will average $102.67 a barrel this year, down from April’s projection of $106.38, the department said today in its monthly Short-Term Energy Outlook.
As result, AAA Michigan spokeswoman Nancy Cain said average gasoline prices in Michigan have fallen for the first time since Feb. 17.
”Clearly the trend is downward and what a welcome trend it is,” said Nancy Cain, spokeswoman for AAA Michigan.
On that date, a gallon of regular unleaded fuel cost $3.20. By May 4, the price of a gallon of regular unleaded had climbed to a record high of $4.26. On Monday, after AAA Michigan surveyed 2,800 service stations, it found gasoline prices for unleaded averaged $4.136 a gallon, or $1.22 more than last year.
But she said it’s not time to celebrate. This week’s Kalamazoo area average is still $1.26 higher than a year ago. And the per-gallon price of gasoline was about $4.14 in some parts of Kalamazoo this morning.
”Crude oil prices came down about 15 percent last week and what you and I pay at the gas pump really follows the crude oil price,” Cain said.
In Detroit, Monday’s average was $4.09, down from $4.13 on Sunday, and some gas stations in the region were charging less than $4.
photo credit: AP – Bruce Halmp