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.



Advertisements

Latest Economic News

  • Think-tank proposes Canada-U.S. swap for NAFTA

    Economic CTV News
    WASHINGTON - The most common uses of Canadian dairy normally include milk, cream, yogurt, butter and cheese. Yet a new report suggests an altogether different purpose for the calcium-packed, bovine treat. The idea - use it as a bargaining chip. Source
  • Asian stocks tick up as Wall Street steadies

    Economic CTV News
    TOKYO - Shares were modestly higher Thursday in Asia after Wall Street steadied overnight. Investors are awaiting a vote in the U.S. Congress on health care legislation that is seen as a bellwether for Donald Trump's administration to deliver on campaign promises. Source
  • Google's YouTube losing major advertisers upset with videos

    Economic CTV News
    SAN FRANCISCO -- AT&T, Verizon and several other major advertisers are suspending their marketing campaigns on Google's YouTube site after discovering their brands have been appearing alongside videos promoting terrorism and other unsavoury subjects. The spreading boycott confronts Google with a challenge that threatens to cost it hundreds of millions of dollars. Source
  • Husky spill in southwest Alberta estimated at 25,000 litres; cleanup going well

    Economic CTV News
    CALGARY -- Husky Energy says about 25,000 litres of crude oil leaked from one of its pipelines in southwestern Alberta last week. Spokesman Mel Duvall said in an email to The Canadian Press that cleanup at the site at Cox Hill Creek west of Bragg Creek is progressing well. Source
  • Budget 2017: Hello Uber tax, goodbye Canada Savings Bonds

    Economic CBC News
    Consumer tax changes in Wednesday's federal budget will add to the cost of Uber rides while ending a public-transit credit. Those are just two of several Liberal government moves that will hit pocketbooks directly, though modestly. Source
  • Trump's SEC pick, a lawyer for Goldman, to face skepticism

    Economic CTV News
    WASHINGTON -- Goldman Sachs may be about to get another friend in Washington. Jay Clayton, a well-connected Wall Street lawyer who is President Donald Trump's pick to lead the Securities and Exchange Commission, is sure to face sharp questions from Democrats at his confirmation hearing Thursday over his years of work for Goldman and other financial giants. Source
  • Budget 2017: Liberals spend on training and innovation while holding line on most taxes

    Economic CBC News
    The Liberal government has delivered a budget designed to brace Canadians for a fast-changing global economy and empower women in the workforce, while taking a wait-and-see approach to sweeping changes south of the border. Budget 2017, titled Building a Strong Middle Class, offers targeted investments to tackle what it calls the "challenge of change. Source
  • Bell and Rogers to ask bars to pay more for sports packages

    Economic CBC News
    Bell and Rogers will soon ask sports bars to pay more for the right to broadcast big games, on top of what they pay for their existing television service. As first reported by Postmedia, the two media conglomerates are asking business subscribers across Canada to pay an additional levy of roughly $120 a month — depending on the size of the bar — on top of their existing cable bill for the rights to air sports channels that broadcast live sporting events such as the TSN, RDS and Sportsnet…
  • B.C. shellfish industry reels as norovirus sickens hundreds, forces closures

    Economic CTV News
    VICTORIA - The head of British Columbia's shellfish growers says the industry has been stunned by a mysterious norovirus that has forced the closure of seven coastal oyster farms and made hundreds of Canadians ill. Source
  • Starbucks Canada vows to hire at least 1,000 refugees

    Economic CBC News
    Starbucks Canada says it will hire at least 1,000 refugees over the next five years. The announcement Wednesday follows a statement in January by Starbucks CEO Howard Schultz that the company would hire 10,000 refugees around the world in the next half-decade. Source