The cost of gasoline at the pump has dropped below $2 a gallon in many areas across the United States, but according to GasBuddy and AAA, the cost of gas may very well drop to $1 a gallon in 2016.
GasBuddy, an organization that tracks local gas costs in real-time, is forecasting a $17 billion reduction in consumer spending on gasoline in the U.S.; this in comparison to last year.
In total, American consumers are expected to spend $325 billion at the pumps this year, according to GasBuddy’s 2016 Fuel Price Outlook.
According to GasBuddy’s projection, the national average will reach $2.28 by the end of the year.
Patrick DeHaan, head petroleum analyst at GasBuddy, was quoted by Boston.com as having said that the organization believes that “the global glut of oil and record level for U.S. crude oil inventory will maintain a considerable pressure on benchmark crude prices” and when coupled with demand from the largest economies in the world, the variables suggest that “the overall trend of recent years should continue, and that means favorable outcomes for U.S. consumers.”
We believe the global glut of oil and record level for U.S. crude oil inventory will maintain a considerable pressure on benchmark crude prices […] Coupled with tepid demand from the world’s largest economies, that suggest the overall trend of recent years should continue, and that means favorable outcomes for U.S. consumers.
At the same time, DeHaan states that “past history is never a guaranteed indicator of future performance,” however, “it does offer clues that are instrumental to short-term and long-term forecasts.”
While past history is never a guaranteed indicator of future performance, it does offer clues that are instrumental to short-term and long-term forecasts
USA Today reports that gasoline costs across South Caroline, Missouri, Alabama, Oklahoma and Arkansas have dropped below $2 and are currently resting at an average of $1.75 or less.
The decision by the Saudi’s to continue exporting high volumes of oil has, according to USA Today, effectively dismantled the OPEC cartel and in the process, guaranteed an oversupply of crude for the world market.
