- Gasoline pump price in U.S. to average $2.04 a gallon: EIA
- Demand to hit record high amid job growth, low prices
Americans driving on their summer vacations will enjoy the cheapest gasoline in 12 years as prices stall just above $2 a gallon.
Drivers will pay 59 cents a gallon less at the pump this summer than a year ago and $1.55 below 2014, when oil prices peaked above $100 a barrel, the Energy Information Administration said Tuesday. Gasoline demand this summer will increase 1.4 percent from last year to a record.
“Low pump prices and continuing growth in employment contribute to more driving, resulting in a forecast of record-high gasoline demand this summer,” EIA Administrator Adam Sieminski said in an e-mailed statement. “For all of 2016, the average household will save about $350 on gasoline purchases compared to last year.”
Americans might save as much as $15 billion on gasoline during June, July and August, compared to the same period last year, which would work out to about $70 per licensed driver, according to Michael Green, a spokesman in Washington for AAA, the nation’s largest motoring group.
U.S. refiners are running at a record pace for this time of year after a global glut of crude sent prices tumbling to the lowest in more than 12 years in February. Oil is 19 percent below last year at this time, even after rebounding on speculation that a meeting in Doha April 17 between producers including Saudi Arabia, Russia, Venezuela and Qatar will yield a deal to cap output.
"There’s no question gasoline prices will be lower than in prior summers," said John Kilduff, partner at Again Capital LLC, a New York hedge fund focused on energy. "The low price of the primary input, which is crude oil, is translating into a lower gasoline price. You’ve got the global oil glut to thank for reduced gasoline prices."
The agency expects regular-grade gasoline will average $2.04 a gallon from April through September. That’s the lowest since 2004, the last time prices averaged less than $2.
Americans are getting back to work and hitting the roads, with driving forecast to increase 2.6 percent this year, the EIA said.