Lower consumption expectations and even lower crude oil prices means gas prices could drop another 2 percent on average next year, a U.S. federal report finds. Photo by John Angelillo/UPI |
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WASHINGTON, Dec. 9 (UPI) -- Low oil prices and more fuel efficient vehicles mean the average U.S. price for a gallon of gas should be about 2 percent lower in 2016, a federal report said.
Motor club AAA reports a national average retail price for a gallon of regular unleaded gasoline at $2.02 for Wednesday, about 1 percent lower than last week. While holiday travel is heavy, overall consumer demand is lower in winter months and, with crude oil prices at six-year lows, the price at the pump has been falling steadily as 2015 winds down.
The U.S. Energy Information Administration anticipates a full-month average for December at $2.04 per gallon. For the year, the average price should be about $2.43 per gallon, down about 28 percent from last year. The full-year average for 2016 should drop another 2 percent to $2.36 per gallon.
As with AAA, the federal report attributes much of the decline in gasoline prices to a weak market for crude oil. The price for Brent crude oil, the global benchmark, is down 39 percent from this date in 2014.
On the demand side, EIA said employment and highway travel are both up over the last eight years, though better fuel efficiency means demand for gasoline is moving in the opposite direction.
"Gasoline consumption growth is forecast to slow by 0.1 percent in 2016, as a long-term trend toward more-fuel-efficient vehicles continues to offset the effects of economic and population growth on highway travel," the report read.
There are 23 states reporting an average price for a gallon of gasoline below the $2 mark. Missouri has the lowest price in the nation at $1.73 per gallon.
