(Washington, January 25, 2016) Gas prices have spent 25 consecutive days below $2 per gallon and could head lower still as reduced seasonal demand and falling crude oil costs combine to send pump prices to the lowest mark in six years. Today’s average price of $1.83 per gallon is the cheapest price since January 2009, and retail averages have fallen for 69 of the past 80 days for a total savings of 40 cents per gallon over this span. Crude oil supply continues to outpace demand, which has helped push gas prices down by seven cents on the week, 18 cents on the month and 21 cents on the year.
Motorists in just 11states and Washington, D.C. are paying an average above $2 per gallon. California ($2.67) continues to lead the market, however the resolution of refinery issues in the state has narrowed the difference between the Golden State and second-place Hawaii ($2.63). Regional neighbors Alaska ($2.44), Nevada ($2.34) and Washington ($2.24) round out the top five most expensive markets for retail gasoline. Consumers in Oklahoma ($1.53) and Missouri ($1.54) are paying the nation’s lowest averages at the pump, followed by the Midwestern states of Indiana ($1.55), Ohio ($1.56) and Michigan ($1.59).
Global oversupply and the anticipation that additional oil will soon enter the market with the lifting of sanctions on Iran, contributed to both benchmarks—Brent and West Texas Intermediate—trading last week at lows unseen since 2003. Market fundamentals remain unchanged and a “lower-for-longer” sentiment is beginning to prevail amongst speculators. Talks are now shifting to whether the market has reached its bottom and if, or when, the necessary adjustments in supply will occur in order to help bring the crude oil market more into balance.
