Gas Prices Below $2 are Coming, AAA Says
The price of gasoline is expected to decline to less than $2 a gallon this winter for most of the country, according to a recent report by AAA.
Gasoline prices typically reach a low in the autumn and winter, when people typically drive less, according to AAA.
“Gas prices in many parts of the country could fall below $2 per gallon by Christmas if the cost of crude oil remains low,” AAA spokesman Avery Ash said in a statement.
“There is good reason to believe that cheaper oil costs, a seasonal decline in driving and the switchover to less costly winter-blend gasoline will continue to push down prices through the end of the year,” Ash said.
The price of oil briefly dipped below $40 per barrel last week and, historically, oil prices below that have resulted in an average gasoline price of less than $2 per gallon, according to the report.
The likelihood of Iranian oil entering the market as well as strong domestic production have helped lower oil prices since June.
“Crude oil remains the primary wild card in determining future gas prices. If OPEC cuts production, the Chinese economy grows stronger or if Iranian oil is unable to enter the market, then oil prices could rise and push up the cost of gasoline. There also is a possibility that oil prices could drop further in the coming months given the weaknesses in the global economy and because refineries conducting maintenance will need less crude oil,” AAA wrote in its report.
AAA warned there is the possibility gas prices still could rise due to a major hurricane striking the Gulf Coast, higher crude oil prices or unexpected refinery problems.
