Americans saved quite a bit of money on gas in 2015, and that trend is expected to continue.
In its year-end report on fuel prices, the American Automobile Association (AAA) revealed gasoline averaged $2.40 per gallon in 2015 – the second-cheapest it’s been in a decade. And the average price should remain near, or even below, current levels during 2016.
AAA estimates the nation saved more than $115 billion on fuel costs last year, as gas prices dropped 94 cents a gallon compared to 2014. That averages out to about $550 in savings for each licensed driver – a significant amount, especially at a time when the slow economic recovery has yet to benefit many American workers.
The last time gas prices were lower was 2009, when they averaged $2.35 per gallon. They increased dramatically after that, jumping to $3.60 per gallon by 2012 and leveling off at $3.34 per gallon in 2014.
When relief at the pump finally arrived in 2015, it was largely due to a glut of oil on the market. Supply has grown faster than demand, thanks in part to near-record production of crude in the U.S. and Middle East. Oil prices fell below $40 per barrel in early December, and are currently hovering around $38. The end result has been steadily declining gas prices.
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For 2016, AAA predicts a gallon of gas will cost consumers between $2.25 and $2.45 a gallon. Seasonal and regional trends will affect prices at certain times and in certain areas; for example, prices could go up as much as 50 cents per gallon near the end of winter as refineries reduce production to conduct maintenance.
In the report, AAA also took time to remind consumers that oil markets are notoriously volatile, which can mean unexpected gas price changes. Most analysts expect the oversupply of oil to last throughout the year, but it is possible that political events could cause that to change. Some even see a fall-off of oil production in countries where extracting it is expensive, such as the U.S.
In any case, 2015 brought Americans significant savings on fuel. That trend should continue into at least the first part of 2016, and has a good chance of remaining throughout the year.
