Crude oil remained below the $28 price level keeping stress on the global markets.
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In its monthly short-term energy outlook, the U.S. Energy Information Administration said regular gasoline will average at $1.98 a gallon nationwide in 2016. According to the EIA, this level of consumption would result in the ethanol share of the total gasoline pool averaging 10 percent in both 2016 and 2017.
According to GasBuddy.com, regular gasoline was selling for $1.19 per gallon at the Citgo station on Rhode Island Street, in Gary. The average price for a gallon of regular will sink to about $1.82 in February, then begin to climb back slowly in the spring.
California remains home to the highest average retail diesel prices in the nation, the agency said: $2.369 per gallon, down 3 cents from last week. Henry Hub spot prices are forecast to average $2.64/million British thermal units (MMBtu) in 2016 and $3.22/MMBtu in 2017, compared with an average of $2.63/MMBtu in 2015.
“Lower crude oil prices, which have fallen more than 70 percent since the summer of 2014, are the main driver of cheaper gasoline prices”, EIA said. Oil supply will outpace demand again this year, and global supplies may exceed demand by as many as 2 million barrels a day in the first quarter of this year, the International Energy Agency said on Tuesday.
“If these numbers prove to be accurate, and with the market already awash in oil, it is very hard to see how oil prices can rise significantly in the short term”, the IEA said.
The American Automobile Association (AAA) says the current average price of gas is 1.72 a gallon.
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US crude futures initially rose on the news, topping $29 a barrel, but quickly retreated, and was at $27.85, down 9 cents on the day by 11:03 a.m. EST. Last year, they paid an average of $1.96 while the national average was $2.18, the GasBuddy website showed.
