As low as gas prices are now, the analysts at GasBuddy.com believe they’ll go even lower in 2016. They estimate consumers will spend $17 billion less at the pump compared to 2015. It would mark the fourth consecutive year of national price declines.
That’s not to say prices will not rise and fall as market conditions fluctuate, but GasBuddy analysts see no sign that the factors that have left the nation with an oversupply of petroleum will relent.
“… we believe the global glut of oil and record level for U.S. crude oil inventory will maintain 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,” says Patrick DeHaan, head petroleum analyst for GasBuddy in a news release.
Those factors include a significant increase in domestic oil production, a lack of curtailment of production by the oil producing nations of OPEC, increased production from oil-rich Iran due to the Iran nuclear accord, and weak demand worldwide, most significantly from China.
GasBuddy also notes that diesel prices will fall lower than regular unleaded gas prices for the first time in more than a decade, lowering costs for consumers as retailers pass on reduced shipping costs.
You can read GasBuddy’s complete 2016 fuel outlook here.