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4 reasons gas prices will keep dropping

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

Reason No. 1: Plunging oil prices

A fundamental factor causing your gas prices to rise or fall is the fluctuation in the price of crude oil. U.S. refineries buy several million barrels of oil every day to supply the world's biggest economy, so even small price changes make a big difference.

When crude oil prices go up or down, gas prices tend to follow. And, oil prices have seen a stunning decline since peaking at around $105 a barrel in mid-2014.

Oil prices have been falling for several reasons, including weaker growth in global oil demand and bulging supplies. Members of the Organization of the Petroleum Exporting Countries, or OPEC, have refused to cut production and instead have pushed it to the highest levels in years.

Overall, government energy forecasters expect crude prices to keep spiraling lower in 2016. The Energy Information Administration says the U.S. benchmark price could drop to an average of $37.59 per barrel over the course of 2016 -- a nearly 23% discount from 2015. That means refineries would pay less for crude oil, and at least some of that savings would be passed on to drivers in the form of cheaper gasoline.

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