Good news: Gas prices continue decline

Gas prices rang in the New Year by reaching the lowest average price ($1.997) for the holiday since 2009.  In 2015, consumers paid an annual average of $2.40 per gallon, the lowest annual average since 2009. Today’s average price of $1.97 per gallon is down 2 cents for the week, down 4 cents per gallon for the month, and down 18 cents for the year, largely due to an abundance of crude oil.

Both crude oil benchmarks, West Texas Intermediate and Brent, traded near two-week lows during this past week with Thursday morning prices touching on their lowest values in over 10 years. Friday’s NYMEX closing price was $33.16, falling for a fifth straight day, losing 10 percent on the week. This marks the lowest settlement since Feb. 9, 2004.

Geopolitical tensions in the Middle East appear to be influencing global oil prices. Saudi Arabia has reportedly cut diplomatic ties with Iran, following an incident that occurred at the Saudi embassy located in Iran, and market watchers will likely be paying close attention to how this situation continues to develop.

“The national average began 2016 under the $2 mark,” said Martha Meade, Manager of Public and Government Affairs for AAA Mid-Atlantic. “Across the Mid-Atlantic region, pump prices have continued their slow decline, giving consumers extra change in their pockets to focus on those New Year’s resolutions.”

Consumer savings should continue in 2016, though retail averages are likely to increase leading up to the summer driving season as seasonal refinery maintenance gets underway this spring. These price increases are expected to be seasonal, and barring any unanticipated events that dramatically impact global or domestic supply, the national average price is expected to remain below $3 per gallon in 2016.

CURRENT AND PAST GAS PRICE AVERAGES

Regular Unleaded Gasoline (*indicates record high)