Gas prices rang in the New Year by reaching the lowest average price ($1.997) for the holiday since 2009. In 2015, consumers paid an annual average of $2.40 per gallon, the lowest annual average since 2009. Today’s average price of $1.99 per gallon is down 1 cent for the week, down 4 cents per gallon for the month, and down 19 cents for the year, largely due to an abundance of crude oil.

West Texas Intermediate (WTI) crude oil has traded below the $40 per barrel benchmark for well over one month. This week the commodity inched closer to the $30 per barrel mark, closing Friday at a near 12-year low of $32.89 per barrel. Geopolitical tensions in the Middle East appear to be influencing global oil prices. Saudi Arabia has reportedly cut diplomatic ties with Iran, following an incident that occurred at the Saudi embassy located in Iran, and market watchers will likely be paying close attention to how this situation continues to develop.

The Weekend

“The national average began 2016 under the $2 mark,” said Tracy E. Noble, Manager of Public and Government Affairs for AAA Mid-Atlantic. “Across the Mid-Atlantic region, pump prices have continued their slow decline, giving consumers extra change in their pockets to focus on those New Year’s resolutions.”

The Week Ahead

Consumer savings should continue in 2016, though retail averages are likely to increase leading up to the summer driving season as seasonal refinery maintenance gets underway this spring. These price increases are expected to be seasonal, and barring any unanticipated events that dramatically impact global or domestic supply, the national average price is expected to remain below $3 per gallon in 2016.

[TLS. Photo – lowest prices around town as of this posting. From Gasbuddy.com]