Gas prices lowest in six years, continue to drop, state average $1.99

Gasoline prices are dropping as oil prices slump.

Gasoline prices are falling.

The average for a gallon of regular gasoline in Palm Beach County dropped another 2 cents Monday to $2.15, and could go even lower over the next few weeks.

Florida motorists are finding the lowest gas prices in six years, AAA said.  On Saturday, Florida’s average price for a gallon of gasoline fell below $2 for the first time since March 22, 2009. Monday, the Florida average stood at $1.99.

Bargain hunters could find gasoline as low  as $1.89 a gallon Monday in Palm Beach County, according to Gas Buddy.com.

Murphy USA, at 1050 N. Military Trail north of Belvedere Road in  suburban West Palm Beach is the lowest reported at $1.89, but four other stations have gasoline priced at $1.90. They are Cumberland Farms, 2692 N. Military Trail at Woodstock Drive; RaceWay,  288 N. Haverhill Road at Wallis Road; Speedway, 5019 Okeechobee Blvd. at N. Haverhill Road and Texaco, 2274 Okeechobee Blvd. at Congress Avenue.

Based on typical seasonal trends, the national average price of gas could remain relatively flat, or drop another 10 cents per gallon over the next few weeks, AAA said.

But by late winter, the national average could rise 50 cents per gallon or more as refineries conduct seasonal maintenance in advance of the busy summer driving season. Despite the likelihood of higher prices by spring, AAA does not expect the national average price of gas to rise above $3 per gallon in 2016.

Patrick DeHaan, GasBuddy senior petroleum analyst, said Monday, “Talk about starting the New Year off right. The national average at $1.99 is a great way to begin 2016, and over twenty cents lower than where we started 2015. The good news is that we could see even more price drops before the seasonal lift that will likely begin as we push towards Spring.

“The fundamentals of oil remain weak which will contribute to low oil prices for some time, while gasoline demand will likely move lower now with the holidays behind us, putting downward pressure on gasoline prices,” DeHaan said.

Gas prices are likely to remain relatively low in 2016. AAA estimates the annual average price of gas in 2016 is likely to end up between $2.25 and $2.45 per gallon, which would be cheaper or at least comparable to this year’s average of $2.40 per gallon.

“Motorists enjoyed some of the cheapest gas prices in years thanks to a global glut in oil supplies which helped keep the price of oil and gasoline production costs low,” said Mark Jenkins, spokesman, AAA – The Auto Club Group. “Gas prices remained at their lowest level for the year-end holidays since the 2008-09 holiday season. Increased demand from holiday travelers temporarily froze prices in place, but gas could get even cheaper in January as demand tapers off.”

Energy prices are forecast to remain low next year, according to the U.S. Energy Information Administration. The EIA projects the price of WTI oil to average $50.89 next year ($49.08 in 2015), and a gallon of gasoline to average $2.36 – 7 cents lower than last year’s average. According to EIA data, gasoline will average $2.06 in the early winter months (Jan 1-Feb 29), $2.38 in the spring (Mar 1 – May 31), $2.55 in the summer (June 1 – Aug 31), $2.38 in the fall (Sept 1 – Nov 30), and $2.24 for the month of December.

There is significant uncertainty over the potential cost of crude oil in 2016, though most analysts expect the market will remain oversupplied throughout the year, AAA said. There currently is a glut of crude oil around the world that has grown faster than demand, and that situation is unlikely to change significantly as Iranian oil enters the marketplace and because the global economy is growing at a relatively weak pace.

Gas prices could rise higher than expected if there are significant changes in the oil markets. Some analysts have predicted that low prices will significantly limit oil production in the United States and in other higher-cost production countries, which could allow supply and demand to re-balance by the end of 2016. Alternatively, it also is possible that political events and conflict could unexpectedly disrupt oil production. Either of these possibilities could lead to higher than predicted oil and gasoline prices for Americans.

 

 

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