US gasoline price heading under $2 a gallon

Lowest since 2009, equivalent Canadian price US$3.22

DALLAS — Gasoline is close to breaking below a key psychological barrier as drivers enjoy some of the cheapest pump prices since the recession.

The nationwide average price of a gallon of regular on Dec. 12 was $2.02, down 58 cents from this time last year, according to auto club AAA. Experts say it could drop below $2 a gallon in the coming days.

Canadian drivers are paying 50 cents per gallon more at $3.22 than US drivers at $2.72. In litres, US drivers pay 89.52 cents (Canadian) compared to $1.059. (See US-Canada gasoline prices here.)

For consumers, this winter is shaping up to be a good one, energy-wise. Forecasters predict warmer weather than normal, and fuel prices are low.

The retail price of heating oil for December through February is expected to average $2.40 a gallon, down 18% compared with last year, according to the Energy Department. The price of natural gas for residential customers is expected to average $8.72 per 1,000 cubic feet, down 9 per cent.

On the roads, many drivers across the country are already seeing gasoline prices well below $2 a gallon. According to data compiled by AAA and the Oil Price Information Service, drivers in about half of the states are already paying less than $2. South Carolina has the lowest average price at $1.79 a gallon. At the high end, Californians are paying $2.65 and Hawaiians are shelling out $2.76.

The relative bargains at the pump might last a while, because global crude oil supplies are high and demand appears to be weakening. Crude prices fell Dec. 11 after the International Energy Agency predicted that demand will grow more slowly next year. The organization expects 2016 growth to be only two-thirds the size of 2015’s increase.

Rising production, mostly from OPEC, is also pressuring oil prices. Iran, Iraq and other members of the oil cartel are trying to boost output as they dig out from economic sanctions and wars.

Tom Kloza, head of energy analysis for the Oil Price Information Service, said gasoline could go as low as $1.79 a gallon by winter, before rising again next year.

“I do think it will be much higher in the spring,” he said, predicting they could rise to $2.75 a gallon.

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