NEW YORK -- The sight is so surprising that Americans are sharing photos of it along with their Halloween costumes, kittens and cuisine--the gas station sign, with a price under $3 a gallon.
"It's stunning what's happening here," Tom Kloza, chief oil analyst at the Oil Price Information Service (OPIS), told the Associated Press. "I'm a little bit shocked."
The national average price of gasoline has fallen 33 cents in October, landing Friday at $3.00 per gallon, according to AAA. Late Friday, the average fell under $3 for the first time in about four years (46 months).
"We have been watching the average fall since June, a rare feat that we had predicted in our 2014 forecast, but to see the magnitude of the decline over the last month has been astounding," Patrick DeHaan, senior petroleum analyst with GasBuddy, which is owned by OPIS, said on GasBuddy's blog late Friday. "And to cap it off, the U.S. average dipped below $3.00 per gallon just minutes ago, and currently sits at $2.999."
The last time the national average was under $3 was on Dec. 22, 2010, when it stood at $2.995 per gallon, said GasBuddy.
When the national average crossed above $3 a gallon in December 2010, drivers weren't sure they would ever see $2.99 again. Global demand for oil and gasoline was rising as people in developing countries bought cars by the tens of millions and turmoil was brewing in the oil-rich Middle East.
Now demand isn't rising as fast as expected, drillers have learned to tap new sources of oil, particularly in the United States, and crude continues to flow out of the Middle East.
Seasonal swings and other factors will likely send gas back over $3 sooner than drivers would like, the news agency said, but the nation is on track for the lowest annual average since 2010, and the 2015 average is expected to be lower even still.
Among the reasons, according to the report:
- Oil fell from $107 a barrel in June to near $81. U.S. output has increased 70% since 2008, and supplies from Iraq and Canada have also increased. At the same time, demand is weaker than expected because of a sluggish global economy.
- In the past, a stronger economy in the United States, the world's biggest consumer of oil and gasoline, typically meant rising fuel demand. No longer. Americans are driving more efficient vehicles and driving habits are changing. Michael Sivak of the University of Michigan Transportation Research Institute calculates that the number of miles traveled per household and gallons of fuel consumed per household peaked in 2004, said AP.
According to GasBuddy, 47 states have at least some prices under $3 per gallon, with the exceptions being Hawaii (cheapest gas is $3.75 per gallon), Alaska (cheapest gas is $3.42 per gallon), and Wyoming (cheapest gas is $3.02 per gallon). Just 15.7% of the nation's 133,000 gas stations are charging more than $3.25 per gallon, while over 60% are charging under $3 per gallon.
"America's daily gasoline bill stands some $108 million lower than one year ago," said GasBuddy.
How much lower could gas prices go?
"That's the question everyone's asking, and we're cautiously optimistic that the national average could fall further, perhaps by another 5 to 10 cents per gallon before year's end. Some parts of the country such as the Southeast might see a greater decrease," said Gregg Laskoski, a senior petroleum analyst with GasBuddy. "The next OPEC meeting is November 27 and that may give us an indication of whether or not OPEC might try to curb production. If it does, that might stop the slide of oil prices."
Click here to view the full GasBuddy blog.
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