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Chattanooga motorists are starting 2015 with the cheapest gas in nearly six years, saving motorists like Suzanne Roberson at least $20 a week.
"These are the best prices I've ever seen," Roberson said Monday while filling up the 26-gallon tank in her Chevy Silverado truck for $1.81 a gallon at the Sam's Club station on Lee Highway in Chattanooga. "I just hope it continues."
With oil prices falling briefly below $50 a barrel Monday for the first time in more than five years, Roberson may get her wish, at least until spring.
The average price of regular gas fell below $2 in Chattanooga over the weekend for the first time since 2009. Surveys of area gas stations by both GasBuddy.com and the American Automobile Association showed the average price of gas in Chattanooga fell Monday to $1.98 per gallon for regular gas, marking the 102nd consecutive day of lower prices for gas.
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Average retail gasoline prices in Chattanooga have fallen 6.7 cents per gallon in the past week, compared with a national average that has fallen 7.7 cents per gallon in the last week to $2.19 per gallon. Gas prices in Chattanooga are now nearly $1.12 per gallon less than the same day one year ago and are 46.7 cents per gallon lower than a month ago.
Patrick DeHaan, senior petroleum analyst with GasBuddy, said the new year "will be a far better year at the pump than what we saw in 2014."
AAA estimates that Americans saved about $14 billion on gasoline in 2014 compared with the previous year, or about $115 per household.
DeHaan estimates consumers will fare substantially better in 2015, shelling out $96 billion less this year at the gas pump "with motorists in most states seeing far more $2 gas than $3 gas."
J.C. Baker, who drove his GMC Yukon to Brainerd from the Highway 58 area to capture the cheapest gas in Chattanooga on Monday, said the drop in gas prices is making trips to the gas station less painful at the pump.
"When you drive a truck like I do, gas prices really make a difference," he said.
Diesel prices also have dropped in Chattanooga, down 44 cents per gallon in the past month. DeHaan predicts that diesel prices will fall nationally by 35 cents to 50 cents more per gallon over the next month or so. That will help reduce shipping costs for most businesses, DeHann said.
Gas is falling along with the plunge in global oil prices, as evidence mounts that the world will be oversupplied with oil this year.
Benchmark U.S. oil dipped to $49.77 Monday before closing down $2.65, or 5 percent for the day, to $50.04 a barrel. Brent crude, a global benchmark used to price oil used by many U.S. refineries, sank $3.31, or 5.9 percent, to $53.11.
In June of last year oil traded above $107 a barrel. But rising production outside of OPEC, especially in the U.S., boosted supplies just as weakness in the global economy slowed the growth in oil demand. OPEC's decision in November to maintain existing production levels accelerated the rout in oil prices.
"It's a matter of supply and demand and right now there is an oversupply of oil on the market and that continues to drive gas prices lower," said Don Lindsey, director of public affairs for AAA of Tennessee in Knoxville. "How low gas prices will go is still uncertain."
Gas prices are likely to rise again in spring when demand increases and refiners convert to cleaner summer-blend fuels to meet environmental regulations in major urban cities. Until then, the market appears to be still trying to find its bottom.
On Monday Citigroup cut its forecast for 2015 global oil prices as a result of high supplies. Citigroup analyst Ed Morse wrote in the report that the first half of this year will bring "a step-up in oversupply, more volatility, and turmoil."
Morse reduced his forecast for global crude to an average of $63 a barrel for 2015, down from an earlier forecast of $80 a barrel.
"I don't know how long it will last, but it's a real savings for us right now," said Ted Caldwell, a Red Bank retiree who says the price of visiting relatives in Kentucky and Missouri has dropped significantly since last spring. "I love it."
The Associated Press contributed to this story.
Contact Dave Flessner at dflessner@timesfreepress.com or 423-757-6340.