The U.S. has overtaken Russia to become the country with the tenth cheapest gas prices. The average price of a gallon of gas in the U.S. is $2.57, just beating Russia’s $2.58 per gallon. All of the countries above the U.S. on this list are other major energy producers including Kuwait, Saudi Arabia, and Venezuela.
Favorable supply and demand conditions in the U.S. have made it near the top of this list. The Organization of the Petroleum Exporting Countries’ (OPEC) attempt to reduce their production has raised prices enough for more American producers to sell more oil profitably, increasing supply and keeping prices at their current plateau of approximately $50 per barrel. The United States has in recent years become a major oil producer, in large part due to the fracking boom. According to CNN Money, the U.S. was the third-biggest oil producer in the world (after Russia and Saudi Arabia) in early 2016.
Meanwhile, demand for oil has decreased due to greater consumer desire for electric and hybrid cars as well as a larger number of fuel efficient vehicles. Americans, however, still uses more gas than any other country, meaning that costs add up over time. While the U.S. ranks third in overall affordability of gas, it ranks 46th in income spent on fuel. Thus, while gas prices are likely to remain low in the near future, demand for alternative energy and electric vehicles is not likely to sputter out.
For more, visit Bloomberg.