Thank/blame low gas prices, stronger employment.
U.S. drivers are using more gas than any year since 2007, which is likely to make 2016 a record year for the number of gallons burned.
“We’re forecasting that annual consumption for 2016 will be a record,” Tim Hess, product manager for short-term energy outlook with the Energy Information Administration (EIA), told Motor1.
Based on preliminary data so far this year, Hess said the U.S. is forecast to use an average of 28,000 barrels of gasoline more per day than in 2007 – an increase of 0.3 percent. More tellingly, that’s an increase of 1.7 percent compared to last year.
Patrick DeHaan, senior petroleum analyst at GasBuddy.com, is a little more conservative in his estimates of this year’s gas consumption totals.
“I think many would agree that it’s going to be very close,” he told Motor1. “We may break them [the records], there’s probably a 50-50 chance that we’ll break the demand numbers set in 2007.
Either way, consumption is up in a big way. Two key factors have led Americans to drive more this year, says Hess: “The two big drivers are employment growth and gasoline prices.”
Those trends combine to mean we’re driving more than ever. Through the first six months of the year, according to the U.S. Department of Transportation, the number of miles covered on U.S. roads was up 3.3 percent compared to the same period in 2015.
Declining unemployment and a stronger economy in general means more Americans are driving to work and for vacations and other trips. And with this summer’s gas prices at their lowest level since 2004, according to DeHaan, there’s even more incentive for drivers to hit the road.
“Gas prices are cheap … so motorists have been taking advantage,” he said. “Americans are certainly driving more miles than we ever have in history.”
According to an analysis by GasBuddy.com, U.S. gas prices in June were the lowest in a decade. That trend continued through much of the rest of the summer; as of writing, GasBuddy.com reports that average gas prices are down more than 27 cents per gallon compared to the same time last year.
So why did gasoline consumption fall so significantly after 2007? Hess says that economic downtown and recession in 2008 and 2009 played a big factor, as did record-high oil prices starting in late 2010. When gas is expensive and the economy is struggling, people tend to drive less and cut back on consumption.
Next year, the EIA expects U.S. gasoline usage to fall slightly, but it should still stay above 2007 levels. As for prices at the pump, DeHaan said GasBuddy.com expects them to fall over the next few months before resettling next year.
“You’ll see a national average that drops under $2 a gallon by Halloween,” he said. “It will probably stay there until late winter or early spring.”