Good News, Drivers: Gas Expected to Drop Below $2 a Gallon
Money + Markets

Good News, Drivers: Gas Expected to Drop Below $2 a Gallon

© Eric Gaillard / Reuters

As anyone who’s taken a road trip this summer knows, gas prices have been headed south for a while now.

They’re currently at a 16-week low, and they’re expected to continue falling to less than $2 per gallon by the end of the year, according to the U.S. Energy Administration’s new Short-Term Energy Outlook. Gas prices are typically cheaper in the winter due to low seasonal demand and the switch to winter-grade gasoline, which costs less to produce.

The report projects that prices will average $2.06 for the year.

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Gas price this week averaged $2.12 per gallon, according to a separate report by AAA, the lowest price for this date since 2004 and more than a quarter less than the June average price.

Lower prices come as more Americans than ever are hitting the road. Americans had driven nearly 1.3 billion miles through May 2016, according to the U.S. Department of Transportation Federal Highway Administration, 3.3 percent more than they’d driven in the same period in 2015.

More than 40 percent of gas stations in the country are already selling gas for less than $2 per gallon. The falling prices reflect high gasoline supply, low oil prices, a strong dollar and a weak global economy.

Gas prices are lowest in South Carolina, where drivers can fill up for just $1.81 per gallon. The states with the next lowest prices are Alabama ($1.86), and Tennessee and Mississippi (both $1.89).