Cheap oil means cheap gas, and Americans can expect to pay a lot less at the pump this year than they did in 2014. As the EIA reports, that means plenty of savings:
The average U.S. household expenditure on motor gasoline in 2015 is expected to be about $1,817, the lowest level in more than a decade. This level is about $700 less than average household gasoline expenditures in 2014. […]
Changes in U.S. gasoline prices tend to follow changes in crude oil prices, particularly the international benchmark North Sea Brent price. The 2015 average Brent price is expected to be $40 per barrel ($0.94 per gallon) lower than the 2014 average…This year, the price of regular gasoline is expected to average $2.40 per gallon compared with an average of $3.36 per gallon last year.
American drivers will be paying on average nearly a full dollar less per gallon of gasoline in 2015, thanks to falling crude prices. And while there are a number of causes for the recent oil price plunge, ultimately this has been a simple case of supply outstripping demand—in this case to the tune of about 1.5 million barrels of oil per day.
U.S. shale has played a huge part in that oversupply, as American frackers have contributed a new supply source to the global market. OPEC, led by Saudi Arabia, has chosen not to cut production (and therefore send prices back up) precisely because of the U.S. shale boom; the Saudis are playing hardball with our shale producers in an attempt to eke out market share, and consumers are winning at the pump.
All in all this will give the average U.S. household an extra $700 to save or spend this year. Shale has done a lot for our country, and while much of it has affecting overarching narratives of our country’s overall energy security, that $700 is a very real and very welcome number for millions of Americans.
Frack, baby, frack.