The party at the pumps will continue. For now. Tumbling oil prices around the world have pulled gasoline prices with them, despite rising demand. But U.S. oil production has already begun to slow, meaning U.S. refineries will be using more foreign crude and eventually facing higher prices.
CLEVELAND, Ohio -- Gasoline will average about $1.95 a gallon for the first three months of this year, the U.S. Energy Information Administration predicted Tuesday.
The EIA expects the price at the pumps will average $2.03 for all of 2016, before ambling up to an average of $2.21 in 2017.
The predictions are based on global oil prices, which in turn reflect global production, global economic growth and global demand for fuels.
The price of the best grade of U.S. oil ended Tuesday at $30.52 after falling to a new low of $29.93 earlier in the day, while some analysts said oil contracts could fall to the mid-twenty-dollar level.
While the EIA expects a lot of volatility in world prices this year, it also believes U.S. crude production has already slowed because falling oil prices don't reflect the high cost of drilling and fracturing wells in shale.
"Because of low crude oil prices, U.S. crude oil production is forecast to fall almost 700,000 barrels per day this year, the first annual decline since 2008," said EIA Administrator Adam Sieminski.
"The process of re-balancing global prices is under way but it takes a while," he said.
"The share of U.S. petroleum demand met by net imports is still expected to be relatively low this year at 24 percent, which is similar to the levels seen in the early 1970s," he added.
The EIA projects that U.S. crude oil production, which has been one factor behind the global oil price collapse, will gradually decline this year and next as gas and oil companies continue to cut back on drilling new wells in response to crude oil prices.
The EIA projects U.S. crude production will decrease from its average of 9.4 million barrels per day last year to 8.7 million barrels per day in 2016 and 8.5 million barrels in 2017.
In its first look at 2017 energy prices, the EIA's monthly Short Term Energy Outlook included a predicted consumer prices for diesel fuel, natural gas, heating oil, propane and electricity.
Here's what to expect:
Diesel fuel (which is reflected in shipping costs both to individual consumers and retail stores): The price at the pump will average $2.29 a gallon this year -- down from $2.71 in 2015. The price in 2017 should average $2.59 a gallon.
Natural gas: Average market prices will rise throughout 2016 but remain below $3 per 1,000 cubic feet until December.
Heating oil: Consumers are paying an average of $2.17 a gallon this year, down 87 cents from last winter.
Propane: Prices are expected to average 18 percent lower than last year in the Midwest.