U.S. gasoline prices are set to fall below an average of $2 a gallon in October and stay there through the winter, government forecasters said Tuesday.
As The Wall Street Journal reports, the Energy Information Administration cut its price forecast for national average retail gasoline prices to $1.95 a gallon in the fourth quarter, down from last month’s forecast of $2.07 a gallon, according to the agency’s short-term energy outlook released Tuesday. The EIA expects gasoline prices to hold below $2 a gallon on average from October through February of next year.
Gasoline prices have slid in recent weeks on concerns refiners have produced a glut of the fuel that is set to persist despite strong driving demand this summer. Gasoline futures have fallen 21% from a year ago, and U.S. oil futures are down 0.7%.
“High gasoline production is leading to motor fuel inventories that are the highest on record for this time of year, which is helping to keep prices down at the pump,” said EIA Administrator Adam Sieminski.
In Baton Rouge, gas prices have been below the $2 per gallon mark for weeks. As of this morning, a gallon was going for $1.90 on average in the city, according to the AAA Daily Fuel Gauge Report. That’s down from $2 a month ago and $2.29 a year ago. The U.S. average this morning is $2.12, down from $2.23 a month ago and $2.59 a year ago.
The EIA also lowered its oil-price forecasts. The agency sees U.S. oil prices averaging $41.16 a barrel this year and $51.58 a barrel next year, down from its prior expectations of $43.57 a barrel in 2016 and $52.15 a barrel in 2017.
The agency raised its forecast for U.S. oil production. The EIA expects U.S. output to average 8.73 million barrels a day this year and 8.31 million barrels a day next year, up from its prior forecasts of 8.61 million and 8.2 million, respectively.
U.S. production fell by 180,000 barrels a day in July to 8.57 million barrels a day, the lowest level since April 2014, the EIA says.
