Gas Prices Could Drop Below $2 By Year's End
CARS.COM — With a glut of cheap oil outpacing demand, industry analysts say that $2 gas could be widely available later this year. GasBuddy.com senior petroleum analyst Patrick DeHaan said regular gas could average less than $2 a gallon in as many as 20 states before Christmas, and predicted that the national average for regular would be $1.98 a gallon for the month of December.
Related: More Fuel-Efficiency News
The AAA travel services organization said in its monthly gas price report that $2 gas looks increasingly likely, especially in the Southeast and central portions of the country.
“The recent price declines are hopefully just a precursor of much bigger savings to come at the pump. We could see many parts of the country make another run toward $2 per gallon by the end of the year if everything keeps running smoothly,” AAA said in its report.
The national average for a gallon of regular gas has fallen 22 days in a row for a total of 16 cents and stood at $2.62 as of early Thursday, according to the AAA Daily Fuel Gauge Report. (Prices fluctuate throughout the day and could change.) That is down from a 2015 peak of $2.80 set on June 15.
AAA predicted that prices could fall 15 cents this month as low global oil prices and an abundant domestic oil supply offset the typical seasonal high demand from motorists taking summer road trips. U.S. oil was trading at less than $45 on Thursday morning, down from more than $61 in late-June.
The national average for regular gas nearly reached $2 in late-January, falling to $2.03 after a record 123 consecutive days of declines. At one point in January, 27 states were averaging less than $2.
That changed when the price of oil started to rise and refineries conducted seasonal maintenance, reducing production, and later switched to more expensive blends of gasoline just as demand picked up during the spring. Now that oil prices have tumbled, AAA said pump prices could fall even more as demand for gas drops after the summer driving season.
“In addition, stations in many parts of the country can switch over to less expensive winter-blend gasoline on Sept. 15,” AAA noted.
The national averages for both regular gas and diesel fuel fell 5 cents the past week. At $2.62 a gallon, gas is 86 cents cheaper than a year ago, and diesel is $1.13 cheaper at $2.70. AAA said gas hasn’t been this low in early-August since 2009, when a recession reduced the amount Americans drove. South Carolina had the cheapest gas with a statewide average of $2.24, followed by Alabama, $2.25, and Mississippi, $2.28.
California still had the highest pump prices, averaging $3.66 a gallon for regular, but that was 14 cents lower than a week ago as supply issues caused by a temporary oil shortage and production problems at refineries were being resolved. Five other states, all west of the Rocky Mountains, averaged more than $3.
Prices also fell the past week in other Western states that had been affected by the same issues as California. In Washington, for example, the average price for regular fell 2 cents to $3.16 despite a 7-cent increase in the state gas tax that took effect Aug. 1.
