Low gas prices likely to continue throughout 2015

CEDAR RAPIDS - Throwback gas prices that took hold in the second half of 2014 are expected to continue in 2015, according to consumer and federal agencies.

Average gas prices in Iowa are expected next week to dip below $2 per gallon for the first time since May 2009, said Gail Weinholzer, a spokeswoman for AAA Minnesota/Iowa. While prices won't continually decrease throughout 2015, they are expected to remain lower throughout the year than they have been in recent years, she said.

"Gas prices are expected to remain relatively cheap throughout 2015," Weinholzer said.

Statewide averages on Tuesday were $2.06 per gallon for regular unleaded, compared with $3.23 at the start of 2014, according to GasBuddy.com. Ethanol blended fuel is already below $2 a gallon at many gas stations.

Weinholzer said gas prices will begin to creep up at seasonal times, such as the changeover from winter to summer grade fuels, which have a higher cost of refining. In the spring, refineries typically reduce production to address maintenance issues, which can cause prices to climb 25 to 50 cents, and high demand in summer months also traditionally cause prices to rise, she said.

However, the increases should just be temporary, she said.

"We still believe it will be below where it's been in recent years, and will stay below $3 a gallon nationwide in 2015," Weinholzer said.

But these rosy predictions could come unraveled based on any number of factors, such as unrest in the Middle East or if Organization of the Petroleum Exporting Countries (OPEC) decreases production targets.

The U.S. Energy Information Administration stated last month that global oil inventories are expected to continue building for the next year, which will apply downward pressure on oil prices.

Brent Crude Oil, which is one of the primary classifications used to set prices, averaged $99.54 a barrel in 2014, but price projections have been revised downward and Brent is starting 2015 at $68.08, according to EIA. Brent could drop to $63 a barrel from March through May as supplies grow, and then increase to an average of $73 a barrel in fourth quarter 2015.

Weinholzer said Americans are predicted to save up to $75 million on gas in 2015. Americans saved $114 per household, or $14 billion as a nation on gas in 2014, according to AAA.

While some parts of the country may see a break in heating costs this winter, many Iowans rely on natural gas to heat homes so declines in crude oil prices should not be a factor, said Justin Foss, a spokesman for Alliant Energy. However, if weather forecasts predicting a milder winter hold true bills could be lighter due to decreased usage, he said.