auto

4 reasons gas prices will drop

Reason No. 1: More oil out there
Reason No. 1: More oil out there © iurii /Shutterstock.com

Reason No. 1: More oil out there

American oil producers have been on a tear lately. Thanks to new drilling in the Gulf of Mexico and the increased use of techniques like hydraulic fracturing, or "fracking," on land, the U.S. is awash in crude.

Domestic oil production has increased every year since 2008, which has contributed to a growing world supply. Meanwhile, American refineries are buying fewer barrels of more expensive foreign crudes.

The increased oil supply in the U.S., combined with weakening expectations for the global economy and world oil consumption, will likely push oil prices lower in 2015. As the cost of oil falls, so will the price of petroleum products like gasoline.

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