Drivers to Fill Up on Cheapest Summer Gasoline in 12 Years
Americans driving on their summer vacations will enjoy the cheapest gasoline in 12 years as prices stall just above $2 a gallon.
Drivers will pay 59 cents a gallon less at the pump this summer than a year ago and $1.55 below 2014, when oil prices peaked above $100 a barrel, the Energy Information Administration said April 12. Gasoline demand this summer will increase 1.4% from last year to a record.
“Low pump prices and continuing growth in employment contribute to more driving, resulting in a forecast of record-high gasoline demand this summer,” EIA Administrator Adam Sieminski said in an e-mailed statement. “For all of 2016, the average household will save about $350 on gasoline purchases compared to last year.”
U.S. refiners are running at a record pace after a global glut of crude sent prices tumbling to a 13-year low in February. Oil still is 19% below last year at this time, even after rebounding on speculation that a meeting of producers — including Saudi Arabia, Russia, Venezuela and Qatar — in Doha, Qatar, on April 17 will yield a deal to cap output.
"There’s no question gasoline prices will be lower than in prior summers," said John Kilduff, partner at Again Capital, a New York hedge fund focused on energy. "The low price of the primary input, which is crude oil, is translating into a lower gasoline price. You’ve got the global oil glut to thank for reduced gasoline price."
The agency expects regular-grade gasoline will average $2.04 a gallon from April through September. That’s the lowest since 2004, the last time prices averaged less than $2.
Americans are getting back to work and hitting the roads, with driving forecast to increase 2.6% this year, EIA said.
