Gasoline prices are likely to continue sliding for the rest of the year and could fall to $3.15 a gallon by Christmas, the lowest national holiday season average since 2010.
That's about 20 cents a gallon lower than current prices, now averaging $3.36 a gallon.
Crude oil prices fell below $100 a barrel Monday for the first time since July, settling at about $99. The 1.8% drop came on word of a fresh Energy Information Administration report on higher-than-expected domestic supplies.
Separately, the Organization of Petroleum Exporting Countries (OPEC) said there could be a drop in energy demand if the global economy weakens.
"With crude falling below $100, this opens the door for the declines to pick up steam,'' says Patrick DeHaan, senior oil analyst for gasbuddy.com.
With ample supplies, lower seasonal demand, refineries producing cheaper winter-grade gas, and tensions in the Middle East continuing to ebb, motorists are likely to find their cheapest gas in three years, says DeHaan. Those same motorists were paying about 32 cents a gallon more last year.
Gasoline prices averaged $3.23 a gallon in 2012, $3.24 a gallon in 2011 and $3.03 in 2010, DeHaan says.Bargain hunters in several states are already enjoying sub-$3 gasoline. In Missouri, where gas prices average the nation's lowest at $3.06 a gallon, it's selling as low as $2.66 a gallon at some warehouse club outlet.
AAA spokesman Michael Green notes that sub-$3 a gallon gas is available in about 24 states, and overall, the cheapest gas prices nationwide since January.
"Lower prices are a real tangible benefit for most people, who need to drive to live their lives,'' Green says. "This means more savings for people and more money in their pockets."
By Gary Strauss, USA Today
Gannett / USA Today