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Falling gasoline prices may be nearing bottom

Unleaded gasoline is advertised below $2 per gallon at the Alton Shop n Save gas station on the Homer Adams Parkway in Alton, Ill., on Monday. Gas prices continue to tumble nationwide. The falling price of oil is creating both pain and gain around the world. (Associated Press)
Frank Witsil Detroit Free Press

DETROIT – Gasoline prices, which at some pumps have been below $2 a gallon, may be nearing a low point.

But analysts said Tuesday the good news is that they probably won’t shoot up much after they bottom out, and likely will average under $3 a gallon throughout 2015.

“This may be getting as close to as good as it gets,” said Patrick DeHaan, senior petroleum analyst with GasBuddy.

In Detroit, gasoline prices, averaging $2.05 a gallon on Sunday, have fallen 13.7 cents per gallon in the past week, compared with the national average of $2.28 a gallon, falling 9.6 cents a gallon in the same period, he said.

GasBuddy tracks prices through daily surveys of gas outlets nationwide.

In football terms, DeHaan said, the price drop probably is in the “final two minutes” of the game, because the decline in gas prices appears to be outpacing the drop in oil prices.

Oil prices have been in a free fall, in part because of less demand globally and more supply in the United States.

In addition, gas prices which are generally lower in the winter, tend to edge up in the spring as people take summer vacations and the industry switches over to summer-blend fuels, which cost more to produce.

But, DeHaan added, there is “still a chance that crude prices resume their slump again, and carry the pump plunge into overtime.”

In Michigan, gas prices have fallen $1.85 a gallon in the past six months, the largest drop in the nation. It was followed by Kentucky, down $1.66 a gallon for the same period; Indiana, down $1.62 a gallon; Ohio, down $1.61 a gallon, and Illinois, down $1.60 a gallon.

AAA, which also tracks gas prices, also put average gas price at $2.05 a gallon in Michigan today, down from an average on-year high of $4.26 in May, and $2.29 a gallon nationally today.

Last week, AAA said the steady daily decline in gas prices nationally – more than 88 days, since Sept. 25 – was the longest steak on record. The previous streak was 86 days, sent in 2008.

Gas prices have declined to some of their lowest levels in five years as the price of oil falls and competition put pressure on gas stations.

The only states where the average gas prices are more than $3 a gallon today were Hawaii, $3.53, and Alaska, $3.09, according to AAA.

Some economists have said that sustained lower fuel prices could give Michigan a big boost because gas prices often are inversely tied to auto, particularly truck, sales; they also let consumers spend more on other things.

According to AAA, the lower prices will let consumers nationally save more than $450 million a day, compared to the gas highs earlier this year.

In addition, AAA estimated that Americans will travel 50 miles or more for the holiday season, which is the most on record.

Overall, DeHaan’s forecast for 2015 calls for prices in the “low $2 a gallon” in January and February and to average “under $3 a gallon” throughout the rest of the year.