DETROIT—For a sign of the challenges in selling fuel efficiency as a virtue, Tanner Hulette need only look at the signs near his auto dealership advertising gasoline for $2.70 a gallon.
Hulette, general manager of Mechanicsville Toyota near Richmond, Va., said he's seeing higher demand for pickups and SUVs, and less interest in the Prius hybrid. The store's year-to-date light-truck sales are up 5 percent while car sales are down 5 percent.
“The floor traffic is dictated by what's going on with fuel,” Hulette said. “If we didn't have SUVs and light trucks right now we'd definitely be feeling some pain.”
The national average price of gas hit $2.97 per gallon on Nov.4, the lowest level since at least February 2011, after falling 6 cents per gallon last week alone and 33 cents in the last month, according to AAA.
Gasoline prices tend to decline every fall, but the recent drop highlights what analysts and economists see as a broader trend toward moderate and more stable fuel prices in the U.S., one fueled by the boom in U.S. oil production, a more efficient fleet and softening global demand for oil.
The U.S. Energy Information Administration, the Energy Department's research arm, said gasoline prices will fall from a projected $3.45 per gallon this year to $3.38 next year, which would be the third straight year of lower prices.
“You average out all the refinery outages, geopolitical issues and other short-term fluctuations and that brings you back to the fundamentals, which are you have a lot of oil,” said Energy Information Administration economist Sean Hill. He added: “We've been expecting gas prices to fall gradually, and they have been, and we don't see that changing.”