As oil slips to the lowest level in more than a decade, gas prices continue logging multi-year lows. The price of a gallon of regular unleaded is $1.89, the lowest national average since February 27, 2009. Gas prices in the southeastern U.S. are also at 7-year lows, with Monday's state averages hitting $1.92 in Florida, $1.80 in Georgia, and $1.68 in Tennessee.
"Oil keeps sinking lower, making the cost to produce gasoline cheaper by the day," said Mark Jenkins, spokesman, AAA - The Auto Club Group. "Prices have dropped nearly a full cent every day for the past 11 days. This should continue until oil prices find their footing."
The price of crude oil fell below $30 for the first time in 12 years. The comes amid concerns that problems in the Chinese economy will reduce fuel demand. There is also downward pressure on prices due to signs that sanctions against Iran would be lifted, allowing a boost in crude shipments form OPEC's fifth-biggest member.
"While this may not be the best news for those in the oil industry, these low gas prices make driving more affordable, incentivizing Americans to take a road trip," Jenkins said.
In light of the recent downward shift in oil and gasoline, the Energy Information Administration has lowered its forecast for the year. The EIA expects a gallon of regular unleaded to average $2.03 - 37 cents lower than initial estimates, and 40 cents lower than last year's average. Earlier this month, the EIA also forecasted that monthly gasoline averages would reach as high as $2.56 in July, this year's monthly average peak has been revised to $2.18 in June. The price for a barrel of WTI crude oil is now forecast to average $38.54 - $10.13 lower than last year.
