AAA: Gas Prices Head Lower—and Lower—in 2016
Will the dinosaur-juice fire sale ever end? AAA doesn’t think so.
The petroleum buffet stays open in the US of A. A report from AAA shows gas prices for 2015 averaging just $2.40 per gallon, the lowest since 2009. Add in a mix of mild winter weather and Americans families responded with a significant boost in holiday travel and spending. Now, a new report from AAA suggests that 2016 gas prices will likely fall lower, averaging between $2.25 and $2.45 per gallon.
According to AAA, most analysts speculate an oversupply of crude oil in the market for the next year as the global economy cools. On the other hand, AAA warns that the prediction could also get thrown out the window should conflict and unrest in the Middle East disrupt oil production. For now, gas prices are expected to steadily fall during the winter season and drop by another 10 cents a gallon in the next few weeks. Once the oil refineries undergo spring maintenance and ready for the spike in driving over the summer, then prices could rise by 50 cents per gallon while still remaining below $3 per gallon.
Based on last year's data, AAA estimated that the average American driver saved a total of $550 on gas compared to 2014. Combined, the United States as a whole has saved $115 billion.
It's difficult to model exactly how long the sag will last, but the low prices will cause oil production in the U.S. and other countries to slow or cease, prompting a rebalance of supply and demand that will raise the gas prices to higher levels—eventually. Until then, it’s all Hellcat burnouts and caviar dreams.
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