The big bust in gasoline prices that saved American motorists an average of $500 each during 2015, shows every sign of continuing into the New Year as gasoline prices sit at their lowest point since the great recession.
Drivers paid the lowest averages for the Christmas holiday since 2009, and pump prices continue to hover around the $2 benchmark. Retail averages have fallen for 45 of the past 52 days, according to AAA. Despite prices moving higher by fractions of a penny on the week, the average price of $1.999 is the lowest for this date since the Great Recession.
Monthly and yearly discounts persist, and consumers are saving five cents per gallon versus one month ago, and 30 cents per gallon versus this same date last year.
Meanwhile, the prospect of still lower oil prices has impacted global stock exchanges as the value of oil stocks continue to drop. Analysts conclude the slump in the oil industry will not abate any time soon continuing to adversely impact the projects of oil companies of all kinds.
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Turmoil inside the auto industry continues to spread as projects are canceled, more companies that bet on higher prices are filing for bankruptcy and hedges, once used to protect oil companies from a steep drop in prices, begin to expire.
The problems on the oil markets is also have an adverse impact on states, such as Alaska and North Dakota, which depended on revenue from petroleum wells to pay the bills for state services.
AAA predicted that leading into 2016, the national average is expected to continue to slide because supply should continue to outpace demand. Gas prices typically fall during this time of year as demand for gasoline decreases, and many motorists will remember the fourth quarter of 2014 when pump averages tumbled from $3.33 on October 1 to $2.26 on New Year’s Eve, AAA noted.
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AAA said while seasonal price declines are again reflected across much of the country, prices on the West Coast have moved higher following supply issues in California. Earlier in the year, ExxonMobil’s Torrance, California, refinery unexpectedly went offline, and as a result, prices spiked in the region.
Ongoing and unexpected refinery maintenance has kept production from returning to normal levels, and new problems have tightened supply within the region and once again sent prices higher. This regional challenge could keep the national average higher than we would otherwise see, and contribute to volatility to close out the fourth quarter of 2015.
Thirty-two states are posting averages below $2 per gallon. Consumers in Missouri at $1.70 and Kansas at $1.75 are paying the nation’s lowest averages for retail gasoline and are joined by an additional 16 states with averages below $1.90 per gallon.
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On the heels of lingering refinery issues, California at $2.83 surpassed Hawaii at $2.69 as the nation’s most expensive market for gasoline, according to AAA.