Gas Prices to Remain Low Throughout Summer
Apr 15, 2015
Summer is traditionally the time when families take road trips and vacations. The children are out of school, the weather is warm and the days longer. Summer is also traditionally the time when gas prices increase. A switch to summer-grade fuel, natural disasters and refinery inspections causes supply to dwindle while demand skyrockets.
This summer, however, traditions are meant to be broken.
When planning a vacation, road trip or even just a drive to the beach this summer, US drivers are going to have a big smile on their face and extra money in their pockets. The Department of Energy recently released its short-term energy forecast and they predict summer gas prices to be at their lowest since the summer of 2009. The national average is predicted to fall 32 percent compared to 2014 with the average gallon of gas costing $2.45 between April and September.
While US drivers are expected to clock more miles and guzzle about 1.6 percent more gasoline this summer, the low cost of gas can be attributed to growing supplies that are outpacing demand. Higher production in North American and elsewhere has been driving the price of crude oil down.
Retailers and tourist destinations will welcome the lower gas prices and hope that translates into more sales and bigger bottom lines. So far in 2015 this has not been the case. Reports show that Americans have kept the additional money in their bank accounts with personal savings rates climbing from 4.4 percent at the end of 2014 to 5.8 percent by the end of February 2015. The reason behind the cautious spending is speculative but the assumption is consumer confidence is low or winter weather conditions have kept most Americans inside. Either way retailers will be hoping to shake those winter blues and entice more customers in their stores this summer.
Of course low gas prices won’t make everyone happy. The typical US family will likely save about $700 in fuel expenses in 2015. Hybrid and electric vehicle manufacturers will surely feel the sting as there is less incentive to buy their products. Instead consumers will opt for trucks and large SUV’s which they have put off purchasing in recent years due to high gas prices.