EIA Predicts Lowest Gas Prices in 12 Years for Summer 2016
Record Consumption Levels Also Predicted
If you drive a Toyota Prius or Chevy Volt, the price of gasoline is possibly something you watch but only with a passing interest. However, if you drive a fullsize truck or SUV, or drive or own a commercial vehicle fleet, variations in fuel prices can have a major impact on your bottom line. Thankfully, for the summer 2016 driving season, the U.S. Energy Information Administration (EIA) is predicting the lowest inflation-adjusted price per gallon for regular unleaded fuel in 12 years, at a nationwide average of $2.27 per gallon. That’s up from the May 2016 forecast of $2.21 but well below the summer 2015 season average of $2.63.
The summer driving season runs between Memorial Day in May and Labor Day in September when many Americans take road trips, historically resulting in higher seasonal fuel consumption. Gasoline demand during the second and third quarters of 2016 is expected to reach a record 9.5 million barrels per day. Prices for the benchmark West Texas Intermediate (WTI) and global Brent Crude are both expected to rise in 2017 due to global uncertainty and instability.
Although this summer driving season may represent a seasonal record, gasoline consumption is actually near a decade low, with a flat consumption outlook going forward. Increased fuel economy standards and consumers buying more efficient vehicles are credited with the lower overall consumption.
Source: Bloomberg, Energy Information Administration