The average price per gallon of gasoline has tumbled below its level of a year ago and is the cheapest since George W. Bush was president, according to online fuel-price information provider GasBuddy.
Gasoline costs an average of $2.35 a gallon in the United States and is the least expensive since 2005, when the national average was $2.11 per gallon.
There are 21 states with lower averages than a year ago. Among the more significant discounted prices to last year are: Ohio (26 cents lower), Illinois (25 cents), Indiana (20 cents), Kentucky (16 cents) and Michigan (13 cents).
“At the beginning of the year, I would have bet against you if you’d have said gas prices this summer could be lower than last year,” said Patrick DeHaan, GasBuddy senior petroleum analyst. “With OPEC’s production cut in November, such a prediction seemed next to impossible, but the resiliency of U.S. shale production has indeed surprised.”
GasBuddy said refinery issues have caused prices to temporarily surge, lifting gas prices over year-ago levels. Hawaii leads the list at 54 cents higher, followed by Nevada (34 cents), Alaska (32 cents), California (31 cents) and Arizona (21 cents).
“There is, however, some good news for everyone. With oil prices plummeting some 5% so far this week, there will likely be lower gasoline prices coming for much of the country.’’ said DeHaan.
The price of gasoline is likely to continue to fall. On Wednesday, the Energy Information Administration reported that domestic crude supplies unexpectedly climbed by 3.3 million barrels for the week ended June 2, ending eight straight weeks of declines.
Major banks such as Goldman Sachs have started slashing their oil price forecasts for this year and next, doubting an OPEC deal to cut production can rebalance markets. JPMorgan cut its 2018 forecast for West Texas Intermediate crude by $11 to $42, according to Oilprice.com. JPMorgan said U.S. crude output is expected to keep growing for several quarters because of lower breakeven costs and higher investment.
The price of oil Friday rose slightly by 22 cents to $45.86 in morning trading on the New York Mercantile Exchange.