With gasoline prices hovering just above $2 a gallon, experts have this advice for consumers: Get used to it.
The coming summer probably will see average prices right around current levels — maybe a smidgen lower. The forecast is for about a 60-cent-per-gallon break from the average price last year and almost $1.50 a dollar a gallon cheaper than two summers ago, according to the U.S. Energy Information Administration.
This summer could be the cheapest driving season since 2004, the agency said in its latest outlook. For reference, the Kansas City Royals were hapless 104-game losers in 2004.
Not that low gasoline prices will change Kansas City drivers’ plans much. Drivers felt the budget pinch at nearly $4 a gallon a lot more than they’re seeing money pile up in bank accounts at $2 a gallon.
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For all of 2016, lower prices at the pump will save the average household budget $350, the energy agency estimated.
“It still gets spent,” said Eric Meo, a business owner who spends about $8,000 a year on gasoline between miles on work vehicles and at home.
Meo was filling up his work truck at a QuikTrip Monday afternoon with his 3-year-old daughter on his hip. Although he bought more fuel-efficient vehicles a few years ago, he still spends plenty on gas.
Nor does $2 gas seem all that cheap, given that prices in Oklahoma were flirting with a dive to $1 a gallon in February.
“I think that they’re decent,” said Vanessa Pasco, a Kansas City resident who filled up Monday afternoon at a QuikTrip. “A couple of years ago, it was a lot more costly. I can definitely live with the price of gas” where it is now, she said.
Gasoline should remain affordable this summer despite the traditional driving season peak in prices and despite the energy agency’s other forecast for a record amount of consumption this year.
“It’s just all economics,” said Sean Hill, an economist at the energy agency.
Officially, the agency forecasts $2.04 a gallon on average, nationwide, for regular unleaded gasoline at the pump this summer. It’s an average so prices sometimes will be higher and sometimes lower.
But compare that with current pump prices, officially $2.07 on average nationally last week. The Kansas City area is seeing prices a bit lower than that.
Hill said big demand is being fed by big supply. Oil is everywhere and cheap because of it.
Credit OPEC, the oil-producing cartel that failed again over the weekend to agree to cut back production. Its inaction helped push crude markets in New York back below $40 a barrel Monday. That dip was despite a strike in Kuwait that cut into production there.
About that strike. The $2.04 average price this summer is a forecast. It depends on oil remaining abundant to keep up with abounding demand for gasoline.
“The system is so fragile,” QuikTrip spokesman Mike Thornbrugh said. “It just takes (a disruption at) a few refineries or pipelines or some international event and you could see prices increase.”
And forecasts aren’t perfect. Last year’s summer average gas price was $2.63 a gallon, well above the $2.45 average forecast last April by the energy agency.
The forecasters had the trend right, but some things changed. Production followed prices lower, and most of that fall in crude output came in the United States.
Cheap oil particularly curtailed the activities of U.S. producers and bankrupted some, just as costly oil had fueled the U.S. shale oil boom using fracking technology. It has cost Americans’ jobs. It contributed to weakness in the stock market.
Would U.S. drivers be willing to pay more at the pump to keep those U.S. oil field jobs?
“I would say yes. If it had to go up another 15 cents to keep jobs and people employed, definitely,” said Danielle Copridge, another customer at QuikTrip on Monday.