The inexpensive fuel should make filling up the family hauler for a trip to grandma's during the holidays a lot easier on the wallet. "The lowest gas prices in nearly seven years are a holiday gift that few consumers could have imagined when gasoline was $4 a gallon," AAA president and CEO Marshall Doney said in a statement.
Folks in some states can expect to pay well below $2.00 a gallon, according to AAA. Missouri has the lowest average at $1.77 per gallon, and it's followed by Oklahoma and South Carolina at $1.78. A tiny number of US stations even are reporting $1.59 a gallon.
Low global oil demand and continued high production have combined to give motorists this unexpected present. According to Market Watch, futures for the benchmark Brent crude fell on Dec. 21 to $36.25, the lowest level since July 2004. Goldman Sachs reportedly thinks the price could drop as low as $20 next year.
The favorable prices encouraged people to drive more than ever in 2015, and that might be dangerous. The National Highway Traffic Safety Administration predicts the many miles on the road could push fatalities up 8.1 percent for the year. If that happens, it would be the largest year-over-year percentage jump since 1946.
U.S. Average Gas Prices Fall Below $2 per Gallon for the First Time Since 2009
Gas-Prices-Party-like-1_99-Dec21WASHINGTON (Dec. 21, 2015) – U.S. average gas prices dropped below $2 per gallon this morning for the first time since March 25, 2009, according to AAA. Today's national average price of gas is $1.998 per gallon. AAA estimates that cheaper gas prices have saved Americans more than $115 billion on gasoline so far this year, which works out to more than $550 per licensed driver. More than 91 million Americans plan to take advantage of cheaper gas prices to drive 50 miles or more during the upcoming holiday period.
"Drivers across the country are celebrating the historic return of cheaper gas prices," said Marshall Doney, AAA's President and CEO. "The lowest gas prices in nearly seven years are a holiday gift that few consumers could have imagined when gasoline was $4 a gallon."
More than two-thirds of U.S. stations already are selling gas under $2 per gallon, and drivers can find at least one station selling gas for less than that price in 47 states. The most common price nationwide is $1.899 per gallon. The national average price of gas is about 41 cents less than a year ago.
Gas prices have dropped because there is more than enough oil and gasoline supplies around the world to meet current demand. In addition, gas prices generally fall through early winter because people drive and use less fuel this time of year.
"We have witnessed a dramatic shift in gas prices that has saved families hundreds of dollars so far this year," continued Doney. "The best news of all is that there is room for prices to drop even more in the coming weeks."
Gas prices already are much cheaper than $2 per gallon in most parts of the country. The lowest one percent of U.S. stations are selling gas for an average of $1.59 per gallon, and more than 13,000 stations are selling gas for less than $1.75 per gallon. The states with the cheapest averages include: Missouri ($1.77), Oklahoma ($1.78), South Carolina ($1.78), Tennessee ($1.79) and Kansas ($1.79). Kansas City, Missouri has the cheapest metro average in the country at $1.68 per gallon. Average state and metro prices can be found on AAA's Daily Fuel Gauge Report website.
Average gas prices last fell below $2 per gallon for a brief span between November 2008 and March 2009 during the height of the Great Recession, as weak global demand and a significant decline in driving helped push prices downwards. Prior to that four-month period, average gas prices were last below $2 per gallon in early March 2005, meaning it has been more than a decade since gas prices were below $2 per gallon when the economy was not in recession.
The national average price of gas has remained more expensive than $2 per gallon for 2,462 consecutive days. During this 81-month span, gas prices averaged $3.11 per gallon and reached as high as $3.98 on May 5, 2011. The highest national average ever was $4.11 per gallon on July 17, 2008.
Based on normal seasonal trends, gas prices likely will remain low through January, and could drop even further if the cost of crude oil remains weak. By late winter, gas prices may rise 50 cents per gallon or more as refineries conduct maintenance in advance of the busy summer driving season. The maintenance reduces fuel production and typically leads to higher gas prices. Despite the expected seasonal increase, the national average price of gas may not rise above $3 per gallon in 2016 because oil should remain abundant and relatively inexpensive.
Domestic supplies of commercial crude oil are about 29 percent higher than a year ago, according to the Energy Information Administration, while oil prices are about $70 per barrel cheaper than in the summer of 2014. Oil is the primary cost associated with making gasoline, and every $10 decline in the cost of oil can reduce gas prices by nearly 25 cents per gallon.
Americans are on track this year to drive a record number of miles, largely due to lower gas prices and a stronger economy, based on early estimates by the Federal Highway Administration. Through October, which is the most recent data available, Americans have driven more than 2.63 trillion miles for the year, which is a 3.4 percent increase over the same period in 2014.
Before buying gas, download the free AAA Mobile app for iPhone, iPad and Android. Travelers can use the app to find lowest gas prices, map a route, access exclusive member discounts, make travel arrangements, request AAA roadside assistance and more. AAA also has unveiled its Apple Watch functionality, which allows users to quickly find cheap gas stations. Learn more at AAA.com/mobile.
As North America's largest motoring and leisure travel organization, AAA provides more than 55 million members with travel, insurance, financial and automotive-related services. Since its founding in 1902, the not-for-profit, fully tax-paying AAA has been a leader and advocate for the safety and security of all travelers. AAA clubs can be visited online at AAA.com.