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Gas prices to fall below $2 for Thanksgiving

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 Oil Price Information Service. Right now the average is $2.072, Kloza said, but it’s still falling. At current levels, nearly 60% of U.S. gas stations are already selling gas for less than $2 per gallon.

“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. 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. Good news 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. Some 67% of Thanksgiving travelers plan to drive more than 200 miles, GasBuddy reported. 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.