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By Andrew Follett
Gasoline prices will remain relatively low for the remainder of this year and the foreseeable future, according to a new survey published Monday by the energy firm Wood Mackenzie.
Oil prices won’t rise above $60 per barrel range this year, according to the survey. The survey looked at the opinions of 170 energy industry insiders and concluded that oil prices will remain in the $60-80 per barrel range until at least 2020.
Low oil prices directly translate to cheap gasoline.
The national average price for regular unleaded gasoline is currently $2.35 per gallon, according to the American Automobile Association (AAA.) This is vastly lower than gas prices just a few years ago. In May of 2014, the average American paid over $3.70 for a gallon of gas. In January of 2016, the national average gas price was $1.99 per gallon, the cheapest since March 25, 2009.
In 2015, consumers paid an annual average gasoline price of $2.40 per gallon. U.S. consumers spent $370 billion on gasoline in 2014, meaning a 28 percent price drop in gas is equivalent to a $102 billion tax cut for the country. American households likely saved $700 to $750 at the pump in 2015, according to analysis by the Energy Information Administration (EIA).
Energy prices dropped 41 percent over the course of 2015 due to increased oil production from hydraulic fracturing, or fracking. Other commodities fell in price as well, but not nearly as much as energy, according to the EIA.
Most analysts agree that low prices at the pump are also enormously beneficial to American households, which tend to use cash not spent on gasoline to save more or pay down debt. While other analysts claim that the extra money is spent on luxury goods, such as eating out at restaurants. Cheap gasoline, however, disproportionately helps poorer families and other lower-income groups because fuel costs eat up a larger share of their more limited earnings.