As international context keeps fueling oil price volatility worldwide, U.S. gas prices continue to sink with few exceptions in the West and Midwest. And, analysts believe that the downward trend may continue through 2016 and even 2017 unless OPEC members decide to trim oil production.
The prices are going down because of uncertainty related to China, Iran, and Fed’s decision on hiking its benchmark interest rate by this year’s end. Oversupply in national suppliers and hurdles in the supply chain may also contribute to the situation, experts explained.
According to a recent report released by GasBuddy, five U.S. states currently have average prices per gallon of less than $2. In South Carolina, Tennessee, Mississippi, Alabama, and Louisiana you can no buy a gallon of gas for median prices ranging from $1.89 to $1.99.
Patrick DeHaan, one of the senior investigators with GasBuddy argues that is week’s slump in gasoline prices is mainly due to the U.S. central bank’s decision to keep the interest rate at its current levels.
In the Midwest, Michigan, Ohio, and Indiana saw a mild increase in pump prices due to fluctuations in the supply and demand chains, while in the West, California, Utah, and Nevada have above the national average retail prices because of this spring’s explosion at Exxon Mobil’s Torrance refinery in California. The refinery was expected to regain full functionality in July which never happened. Experts believe that additional repairs along with regulatory hurdles may be the main cause.
Nationwide, 25 percent of gas stations now sell gasoline for less than $2 per gallon, and market watchers believe that the national average will soon fall under that threshold despite mild spikes expected to occur in the next few weeks due to fall maintenance repairs at U.S. refineries and population switching to winter gasoline
GasBuddy experts noted that Americans should expect $1.99 to be the regular price at the gas pumps across the U.S. That’s a sharp decrease compared with last year’s median retail prices of more than $2.5 per gallon. In 2014, you couldn’t buy fuel for less than $3 per gallon in more than 90 percent of gas stations.
Currently, the national average is $2.28 per gallon, which makes it the lowest in more than a decade. Only in 2004, the average was lower with $1.85 per gallon.
Analysts at GasBuddy believe that gas prices would remain low unless the world’s largest crude oil producers decide to cut the excess output. In the meantime, Americans embrace the new prices either as a temporary benefit for their budget or as an opportunity to buy an SUV or a light truck.
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