U.S. gas prices expected to average under 2 dollars per gallon in 2016

The average gas prices in the United States are expected to stand under 2 U.S. dollars per gallon in 2016 due to oil glut, the U.S. Energy Information Administration (EIA) says.

Regular gasoline will average 1.98 dollars a gallon this year, and the last time oil averaged less than 2 dollars for a year was 2004, the EIA said in its monthly short-term energy outlook released on Tuesday.

Fueled by continued low prices and an improving job market, gasoline consumption in the U.S. increased by 2.6 percent last year to 9.2 million barrels a day, the highest level since 2007, the EIA said.

The average U.S. household saved 660 U.S. dollars on gasoline in 2015, when the price of a gallon averaged 2.43 dollars, the agency said.

On Tuesday, U.S. oil closed at 27.94 dollars a barrel. The benchmark U.S. crude is expected to average 37.59 dollars a barrel this year, down from 48.67 dollars last year. International crude will average 37.52 dollars, down from 52.32 dollars a barrel last year.

The pump savings are believed to be a direct result of the 70-percent fall in crude oil prices since mid-2014. Oil supply will outpace demand again this year, and global supplies may exceed demand by as many as 2 million barrels a day in the first quarter of this year, the International Energy Agency said on Tuesday. Enditem