Gas prices to fall below $2 for Thanksgiving

Nathan Bomey | USA TODAY

Show Caption Hide Caption Lower gas prices greet Thanksgiving holiday drivers AAA said about three-quarters of a million Coloradans will hit the road for the upcoming Thanksgiving holiday and travel more than 50 miles. That will cost them a lot less than it did last year. 9NEWS at 5 p.m. 11/23/15.

Thanksgiving travelers will pay less for gasoline than they have in more than a decade.

The average price of unleaded gasoline is expected to hit $1.99 on Thanksgiving, GasBuddy.com analysts reported Monday.

That's the lowest it's been for Turkey Day since 2004, said Tom Kloza, global head of energy analysis for the Oil Price Information Service, an outfit that keep tabs on energy pricing trends worldwide.

Right now,the average is $2.072, Kloza said. Nearly 60% of U.S. gas stations are already selling gas for less than $2 per gallon. But prices, he says, are still falling

“We had lower prices in 2008 and 2009, but not for Thanksgiving,” Kloza said. “The cheapest markets are in the Great Lakes states."

Some of the cheapest prices in the Midwest are in Indiana ($1.803), Ohio ($1.804) and Missouri ($1.860), according to Gas Buddy, an online service in which consumers report on what they paid for gas at particular stations. The South is also enjoying low prices, including Arkansas ($1.881), Louisiana ($1.877), Alabama ($1.841), Mississippi ($1.855), Texas ($1.855) and South Carolina ($1.841).

The highest price in the continental U.S. is $2.740 in California.

Gas prices are down from $2.81 per gallon a year ago, according to GasBuddy. But the news at the pump for consumers is bad news for energy producers.

The global energy industry is facing a massive surplus in oil production, which has led many oil companies to shed thousands of jobs and slash investment plans.

But U.S. producers have continued pumping oil even as the Organization of the Petroleum Exporting Countries (OPEC) has kept production at a high rate. That has depressed prices.

“This is a glut of crude,” Kloza said. “It’s a glut everywhere you look.”

The typical U.S. driver will save roughly $75 on the road in the 40-day peak shopping season leading up to Christmas, compared with recent averages, Kloza said.

“I don’t know what he or she is going to spend it on, but it’s a substantial amount of money,” he said.

It's especially good news for the millions of travelers who will hit the road this week. About 67% of Thanksgiving travelers plan to drive more than 200 miles, GasBuddy reported.

An estimated 42 million Americans are expected to take a trip of at least 50 miles by car from home over the Thanksgiving holiday weekend, up 0.7% from a year ago, AAA reports. Overall, travel by all means is likely to hit the highest levels since 2007.

For months, retail gasoline prices have remained higher than analysts would typically expect, considering rock-bottom oil prices. With oil prices hovering in the $40- to $50-per-barrel range for several months, gas has remained in the low $2 range.

Analysts say the price of gas depends on many factors, including refinery costs, distribution and blends.

But the drop below $2 indicates that retail prices are finally catching up with crude prices.

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.