Consumers are saving on energy costs, and that's boosting household finances and pushing dollars that would have gone to gasoline and winter heating into other parts of the U.S. economy.
Crude oil prices continued to slide Friday, with internationally priced Brent nearing a five-year low as Saudi Arabia discounted product to the United States and Asia. RBOB gasoline futures also fell, pushing retail gas prices down 8 cents more this week.
According to Triple A, the national average for a gallon of regular gas is now $2.71, down 25 cents from a month ago and 54 cents from the same time last year. In fact, consumers are saving roughly $200 million a day on gasoline compared with last year, according to AAA. And also noteworthy, this week Oklahoma City saw its price drop below $2 a gallon.
"Gas prices have fallen at a remarkable pace that would have been unthinkable just a few months ago," said Avery Ash, AAA spokesman. "Lower gas prices represent real doorbuster savings as everyone begins their holiday shopping."
Triple A said that while it thinks that gas prices can slide another 25 to 20 cents in the short term, it would take a $25 to $30 decline in crude prices to push the national average under $2.
Still, every penny counts when it comes to gas.
"According to our calculations, every 1 cent annual change in gasoline prices is worth approximately $1 billion in annual U.S. household energy consumption," said Joe LaVorgna, chief U.S. economist at Deutsche Bank.
It's important to note that gas prices typically are lower in the winter months as refineries switch to a cheaper, winter blend and consumers tend to hit the road less, but seasonal declines this year are steeper than they have been in the last five years.
"Gas prices typically remain low in winter because people drive less and do not use as much gasoline during the colder months. There is little reason to expect gas prices to increase significantly until spring, unless there is an unexpected spike in the cost of crude oil or an unanticipated disruption to domestic refining or distribution, which could send prices higher in an impacted region," Triple A said.
Meanwhile, many economists expect cheaper gas to encourage driving this winter. Recent data show that sales of automobiles are at record levels, and analysts expect tire sales to increase as well.
To add to the holiday cheer, prices of natural gas have plummeted as well. Temperatures across the country have eased, and supplies of the commodity have been replenished above five-year averages for multiple weeks in a row.
Natural gas prices have seen a 12 percent drop this month and are well below the key $4 level.
"Nat gas has gotten crushed," said Anthony Grisanti, founder of GRZ Energy. "It just hasn't been as cold as people thought it would be. Having said that, it's tough to get short here, because nat gas trades on the short-term weather forecast, and we're just starting winter."