Still, the EIA’s recent Short-Term Energy Outlook (STEO) predicts that retail prices for regular gasoline will average $1.98 per gallon in 2016, which would be the lowest annual average since 2004, jumping up to $2.21 per gallon in 2017.
Lower crude oil prices contributed to U.S. regular gasoline retail prices declining to an average of $1.95 per gallon in January, down from an average of $2.04 per gallon in December, the agency added.
EIA projects regular gasoline retail prices to fall to $1.82 per gallon in February and average $1.88 per gallon for the first quarter of 2016, before rising during the spring.
Retail prices for diesel, which averaged $2.71 per gallon in 2015, are projected to average $2.22 per gallon for 2016 before rising to $2.58 per gallon in 2017, the agency noted.
Continuing increases in global oil inventory is placing “significant” downward pressure on oil prices – a trend that started in mid-2014, EIA pointed out – and should continue to suppress both global oil prices and U.S. fuel prices.
After growing by an estimated 1.8 million barrels per day (b/d) in 2015, global oil inventories are predicted to grow by another 1.4 million b/d in the first quarter of 2016, helping keep Brent prices below $40 per barrel through August, the agency said.