“Motorists enjoyed some of the cheapest gas prices in years thanks to a global glut in oil supplies which helped keep the price of oil and gasoline production costs low,” said Mark Jenkins, spokesman for AAA. “Gas prices remained at their lowest level for the year-end holidays since the 2008-09 holiday season. Increased demand from holiday travelers temporarily froze prices in place, but gas could get even cheaper in January as demand tapers off.”
Energy prices are forecast to remain low next year, according to the U.S. Energy Information Administration. The EIA projects the price of West Texas Intermediate oil to average $50.89 next year ($49.08 in 2015), and a gallon of gasoline to average $2.36 – 7 cents lower than last year’s average. According to EIA data, gasoline will average $2.06 in the early winter months (Jan. 1-Feb. 29), $2.38 in the spring (March 1-May 31), $2.55 in the summer (June 1-Aug. 31), $2.38 in the fall (Sept. 1-Nov. 30) and $2.24 for December.
Based on typical seasonal trends, the national average price of gas could remain relatively flat, or drop another 10 cents per gallon in the next few weeks. By late winter, the national average could rise 50 cents per gallon or more as refineries conduct seasonal maintenance in advance of the busy summer driving season. Despite the likelihood of higher prices by spring, AAA does not expect the national average price of gas to rise above $3 per gallon in 2016.
Regional gas prices will continue to vary dramatically around the country in 2016. Problems with local refinery production, especially during spring maintenance and the busy summer driving season, could temporarily send regional gas prices much higher than the national average. Events like this could cause prices in some areas to rise above $3 per gallon, just as they did in 2015.
There is significant uncertainty over the potential cost of crude oil in 2016, though most analysts expect the market will remain oversupplied throughout the year. There currently is a glut of crude oil around the world that has grown faster than demand, and that situation is unlikely to change significantly as Iranian oil enters the marketplace and because the global economy is growing at a relatively weak pace.
It is possible that gas prices could rise higher than expected if there are significant changes in the oil markets. Some analysts have predicted that low prices will significantly limit oil production in the United States and in other higher-cost production countries, which could allow supply and demand to re-balance by the end of 2016. Alternatively, it also is possible that political events and conflict could unexpectedly disrupt oil production. Either of these possibilities could lead to higher than predicted oil and gasoline prices for Americans.
Gas prices in 2015 averaged about 94 cents per gallon less than 2014
The national average price of gas in 2015 was $2.40 per gallon, which was the second cheapest annual average of the past ten years. Only 2009 was lower during that time.
The annual average price of gas in recent years was $3.34 (2014), $3.49 (2013), $3.60 (2012), $3.51 (2011), $2.78 (2010) and $2.35 (2009).