In some more good news for energy consumers, AAA is predicting drivers will pay less for gas prices in 2014 compared to the year before. AAA predicts a 5 cent drop in the average price of a gallon of gasoline this year due to increased domestic oil production, increased refining capacity, and reduced demand.
This confluence of increased supply, coupled with lower demand helped drive down average gas prices in 2013 to their lowest level since 2010. In 2013, the average price of a gallon of regular gas was $3.49, compared with $3.60 in 2012 and $3.51 in 2011, AAA said.
Meanwhile, domestic crude oil and natural gas production has hit quarter century highs, led by dramatic gains in Texas, North Dakota, Pennsylvania and Colorado. These states are home to energy rich shale rock formations which can be fracked to release vast stores of energy.
The Energy Information Administration predicts that prices will steadily decline for the next two years, as domestic oil and gas production continues to rise, reducing the cost of transporting crude oil and ultimately, prices at the pump.