Drivers saved $115 billion at the pump in 2015 thanks to low gasoline prices, AAA reported Thursday, a development that likely buoyed consumer optimism and spending throughout the year.
AAA, the nonprofit organization for drivers, estimated that the average driver saved $550 on gas in 2015.
The national average price of a gallon of gas throughout the country was $2.40, according to the group, nearly a dollar less than in 2014 and the second cheapest annual average in 10 years.
The group attributed the drop to the worldwide glut of crude oil. Since summer 2014, the price of a barrel of Brent crude oil has plummeted from more than $110 to less than $40.
The bust has cut off the boom in oil production in the U.S., hurting commerce in oil patch states like North Dakota and Texas. This year, drillers have shed more than 100,000 oilfield jobs.
Nevertheless, the hit to production has been offset by the benefit to consumers. The Federal Reserve sees low gas prices as one of the major factors propping up consumer sentiment. Consumer sentiment was the highest since 2004, according to the University of Michigan’s survey of consumers.
Fed officials see the negative effects of falling oil prices as a “transitory” problem for the economy, meaning one that will fade over time as other aspects of commerce recover.
Meanwhile, AAA is forecasting gas to remain cheap in 2016, estimating that the average price of gas will end up between $2.25 and $2.45, continuing to alleviate financial pressure on families.
“There currently is a glut of crude oil around the world that has grown faster than demand,” the group said, “and that situation is unlikely to change significantly as Iranian oil enters the marketplace and because the global economy is growing at a relatively weak pace.”
