Gasoline tumbles to 7-year low at $1.91/gallon
Indicating seven year low, the average gasoline price fell further to $1.91 per gallon in the US. The gas price drop may end shortly and will rebound in the near future, if crude oil price picks up. AAA has predicted that the average may not go above $3 a gallon in 2016.
Gasoline price eased 14 cents during the past two weeks and is hovering at $1.91 a gallon. The prevailing gasoline price is lowest in the past seven years, according to an industry analyst Trilby Lundberg, who further predicted that price fall may soon be over in the wake of surging crude costs.
The latest gasoline price is 16 cents per gallon. Among large cities in 48 states, the gasoline price on highest average was $2.80 per gallon in Los Angeles. The lowest average price in Tulsa, Oklahoma, was $1.48 per gallon. The US average diesel price fell 12 cents during the two weeks and is hovering at $2.81 per gallon, according to US News.
AAA had already made its projections on gas prices for 2016. AAA compiles gas price information across the US. It has estimated that gasoline price is expected to be at lower levels throughout 2016 year. It earlier projected that unleaded gasoline might be in the range of $2.25 and $2.45 a gallon. The average gasoline price for 2015 was $2.40. This helped the US consumers save $540 on gas.
The rebound in crude prices may also trigger bottoming out in the US gas price. The latest survey in 22 January 2016 reveals that regular grade gas eased to $1.91 per gallon from $2.05 on 8 January. This price level is the lowest since 23 January 2009, as reported by Reuters. If crude oil price doesn't fall further, then it will result in a rebound in gasoline price.
Gas prices in Rhode Island too fell to $1.91 per gallon. The gas price fell 20 cents during the last eight weeks in the Island. The price fell 19 cents lower when compared with previous corresponding year. The gas price in Rhode Island is hovering at eight cents per gallon higher than the national average of $1.83 a gallon, according to Bristol Herald Courier.
AAA further said that it didn't think the average would go above $3 a gallon in 2016. The oversupply in crude oil across the world is keeping pressure on oil price. The crude oil price fell 35 percent in 2015.
The cost of crude oil is expected to remain at lower levels. As long as cost of crude oil is low, the US gasoline price continues to be cheaper. However, the geo-political unrest and unexpected changes in global oil markets may lead to price rise, according to AAA. In this situation, the oil price may vary on region basis.