Average gas price in U.S. heads below $2 for first time since 2009

DALLAS -- Gasoline is close to breaking below a key psychological barrier in the United States, as drivers enjoy some of the cheapest pump prices since the recession.

See Full Article

The nationwide average price of a gallon of regular Saturday was US$2.02, down 58 cents from this time last year, according to auto club AAA. Experts say it could drop below $2 in the coming days.

For consumers, this winter is shaping up to be a good one, energy-wise: With oil below $40, natural gas under $2, and a relatively warm winter predicted, they also stand to pay less to heat their homes.

According to data compiled by AAA and the Oil Price Information Service, drivers in about half of the states are already paying below $2 for gas. South Carolina has the lowest average price at $1.79 a gallon. At the high end, Californians are paying $2.65 and Hawaiians are shelling out $2.76.

The relative bargains at the pump might last a while, because global supplies are high and demand appears to be weakening. Oil prices fell Friday after the International Energy Agency predicted that demand will grow more slowly next year. The organization expects 2016 growth to be only two-thirds the size of 2015's increase.

Rising production, mostly from OPEC, is also pressuring oil prices. Iran, Iraq and other members of the oil cartel are trying to boost output as they dig out from economic sanctions and wars.

Crude oil futures fell $1.14 to close at $35.62 a barrel Friday on the New York Mercantile Exchange.

Tom Kloza, head of energy analysis for the Oil Price Information Service, said gas could go as low as $1.79 a gallon by winter, before rising again next year.

"I do think it will be much higher in the spring," maybe $2.75, he said.

Refiners often curtail production to perform maintenance on their plants during the slower late-winter and early-spring periods, and that is followed by the annual summer surge in driving. That yearly decrease in supplies and uptick in demand usually pushes prices up as the beginning of summer approaches.

While gas is at its cheapest price in more than six years, some suggest it should be even cheaper.

Jodie Gunzberg, the head of commodities research at S&P Dow Jones Indices, studied monthly prices for crude oil and gasoline going back to 1988. She found that the two generally went up or down about the same. But so far this year, she said, oil prices are down 29 per cent while gasoline is down only 16 per cent.

If gasoline prices had behaved exactly the same as oil prices this year, she estimates that consumers would be saving another 6 per cent at the pump -- about 12 cents on every gallon.

Consumers might not complain too loudly, however. Filling up a 20 gallon tank will cost an average $40.40 this weekend compared with $52 a year ago. And the Energy Department said this week that the average household can expect to spend $570 less for heating oil this winter, while a natural gas user should save 13 per cent.


Latest Economic News

  • Global shares mixed ahead of Federal Reserve meeting

    Economic CTV News
    TOKYO -- Global shares were mixed Tuesday as some indexes recouped earlier losses set off by an overnight decline on Wall Street. Investors are awaiting the first Federal Reserve meeting under the new chairman, Jerome Powell, and anticipating the first rate increase of the year. Source
  • Expected U.S. rate rise will matter to Canadians with big debt: Don Pittis

    Economic CBC News
    A rise in U.S. interest rates tomorrow is so confidently expected by nearly everyone that a failure to hike rates would shock world markets. In his first official press conference since taking over for Janet Yellen, Federal Reserve chair Jerome Powell is expected to set the direction for interest rate increases this year and into the more distant future. Source
  • Q & A: Russian trolls may be a factor in heated Canadian pipeline debate

    Economic CBC News
    Russian trolls could be a factor in the acrimonious pipeline debates occurring in Canada and the United States, says an expert on ethical hacking and network security. "It could influence it greatly," said John Zabiuk of Edmonton's Northern Alberta Institute of TechnologyNotorious Russian online troll farm also took swipes at Canadian targets"Already there is a wide rift of the knowledge that people have with regard to these projects," he said. Source
  • Scandal-hit Weinstein Co. files for bankruptcy protection

    Economic CTV News
    NEW YORK -- The Weinstein Co. filed for bankruptcy protection on Monday with a buyout offer in hand from a private equity firm, the latest twist in its efforts to survive the sexual misconduct scandal that brought down co-founder Harvey Weinstein, shook Hollywood and triggered a movement that spread out to convulse other industries. Source
  • Court filings say multiple offers for Toys 'R' Us Canadian stores

    Economic CTV News
    U.S. court filings show that debtors for Toys "R" Us have received multiple non-binding offers for the Canadian division of the troubled retailer. The bankruptcy documents say debtors had reached out to more than 20 interested parties in a bid to sell off the 82 stores in Canada as the toy retailer looks to wind down operations. Source
  • TSX ends down along with U.S. markets, Canadian dollar makes slight gains

    Economic CBC News
    Canada's main stock index joined U.S. markets in the red Monday as a Federal Reserve meeting looms and a share price hit at Facebook over improper data use weighed on the tech sector. The S&P/TSX composite index closed down 121.94 points to 15,589.39, led by declines in energy and base metals as both oil and copper prices slipped. Source
  • Analyst warns B.C. gas prices could soon hit a record high

    Economic CTV News
    VANCOUVER -- Drivers in British Columbia should brace for record high gasoline prices this summer and the financial pain has the potential to spread across the country, says a petroleum industry analyst. Dan McTeague of the online tech company GasBuddy predicts that beginning in April and continuing to September, gasoline prices across much of B.C. Source
  • Facebook shares fall as EU, U.S. urge probes of data practices

    Economic CBC News
    Facebook Inc. faced growing pressure on Monday after European and U.S. lawmakers called for investigations into reports that a consultancy that worked on President Donald Trump's campaign gained access to data on 50 million Facebook users. Source
  • Nordstrom Rack to open first Canadian store in Vaughan, Ont., Toronto to follow

    Economic CTV News
    TORONTO -- American department store Nordstrom is opening the first Canadian location of its discount Rack chain on Thursday. The 35,000-square-foot store will be situated north of Toronto at Vaughan Mills mall. It is promising savings of up to 70 per cent on products from 38 of the 50 brands already sold in its Canadian department stores. Source
  • Greenpeace says brands refusing to reveal palm oil sources

    Economic CTV News
    JAKARTA, Indonesia -- Greenpeace says several major household brands including Hershey and Johnson & Johnson have failed to disclose where they get their palm oil from despite vows to stop buying from companies that cut down tropical forests to grow the widely used commodity. Source