Monday, January 4, 2016

AAA predicts 2016 gas prices may be even lower than 2015


How low can gas prices go? No one is quite sure, but AAA thinks we might not be there yet.

AAA tracks gas prices around the country. In 2015, it reported the average gas price in the United States was $2.40 per gallon. Now, it is predicting the average for 2016 will fall somewhere between $2.25 and $2.45 per gallon.

The price of oil has fallen below $40 per barrel from more than $100 per barrel as recently as mid-2014. This fall was due to several factors, including the doubling of oil production in the United States over the last six years and the increase in efficiency of cars, which has driven down demand.

CNN Money estimates the drop in gas prices saved drivers in the United States about $540 on average in 2015. That is more than $1000 per household since most households have two drivers.

However, don't bank on having the same savings in 2016. AAA points out oil is always susceptible to political crises and other unexpected price shocks.

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