For the first time since 2009, crude oil prices have plunged to below $40 a barrel. That price was above $100 as recently as June.
Watch more: Find the cheapest gas prices in your area
What’s going on
Despite a drop in energy prices that began last fall, U.S. oil companies have continued pumping out oil at rapid rates, according to CNN Money. Newer technologies and cheaper expenses have allowed them to stay profitable, even as prices have dropped.
And while the global oil supply has continued to increase (for a variety of reasons), demand has not — pushing prices lower.
The Iran nuclear deal with the U.S. could also be a factor, because once sanctions are lifted, Iran will be able to sell its oil on the world markets.
Read more: Iran nuclear deal could push gas prices below $2 this year
What it means for gas prices
Despite the cause, big drops in oil prices mean good news for American drivers!
The average price for a regular gallon of gas in the U.S. is $2.63, according to AAA. That’s a big drop from $3.44 a year ago, and experts predict prices around the U.S. could drop to $2 or less by the end of the year. Some states are already seeing prices close to $2 per gallon.
