Despite Stall, Christmas Gas Prices Under $2 Projected
CARS.COM — After declining for 25 days in a row, the national average for regular gasoline stalled this week, coming in just 4 cents short of $2 a gallon as pump prices stabilized in much of the country. The AAA Daily Fuel Gauge Report said Thursday that the national average for a gallon of regular gas was $2.04, fractions of a cent higher than it was on Tuesday, before prices began to inch upward. That is within a penny of the lowest average this year, set in late-January.
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Though the recent price decline seems to have run out of gas, AAA and others continue to predict that the national average will drop below $2 by Christmas. Seasonal refinery maintenance that crimped gasoline production during the fall has largely been completed, so most refineries are operating at or near capacity, increasing the supply of gas.
“Demand for gasoline typically declines during the winter months and the gasoline market may become even more oversupplied in the near term, which should keep gas prices relatively low,” AAA said in a release. “Barring any unanticipated disruptions in supply, or swings in the price of crude oil, retail averages are expected to continue to fall leading into 2016.”
A glut of oil and low oil prices have been the major drivers of shrinking gasoline prices. U.S. oil was trading at less than $41 a barrel early Thursday, nearly $30 less than a year ago. Still, the OPEC oil cartel is scheduled to meet Friday to discuss production levels, and GasBuddy.com analyst Patrick DeHaan said the results of that meeting could impact motorists in the U.S.
“Expectations are that OPEC will hold production levels unchanged, but there is growing pressure on (Saudi Arabia), OPEC’s largest producer, to cut production in light of supply that greatly exceeds demand,” DeHaan said in a statement. “Should OPEC make any surprise moves — either opting to officially cut production or the seemingly impossible (option) of raising production — it could greatly weigh on gasoline prices not just for the rest of 2015, but for 2016 as well.”
In the meantime, motorists across the country are spending far less to fill their tanks than a year ago. The national average of $2.04 a gallon for regular gas is 71 cents cheaper than a year ago. For someone who burns 15 gallons a week, that leaves more than $10 in their wallet. At $2.54 a gallon, premium is 61 cents cheaper, and diesel, at $2.41, is $1.15 cheaper.
Motorists are seeing bigger savings in some states. Compared to this time last year average prices are down by at least 85 cents in Illinois, Indiana and Ohio; 97 cents in Michigan; $1.04 in Hawaii; and $1.10 in Alaska. AAA listed 21 states as averaging less than $2, with South Carolina and Michigan posting the lowest average at $1.83. Six states average $1.85: Alabama, Mississippi, Missouri, Ohio, Oklahoma and Texas.
Hawaii had the highest average for regular, $2.81, followed by California, $2.69, and Nevada, $2.51. Those are the only states averaging more than $2.50. GasBuddy noted that, as of Monday, nearly two-thirds of the nation’s 130,000 gas stations were selling regular for less than $2; a year ago, no stations were under $2.
