Gas Heads to $3 a Gallon, Experts Say

We've come through the first weekend of summer to find that the price of gasoline has dropped yet again, on the way to $3 a gallon — or less — by autumn.

Motorists in some parts of the country are already paying less than $3 a gallon, according to USA Today. The average price in South Carolina is the cheapest at $3.06, with nearly 30 percent of service stations selling gas below $3, the newspaper reports.

In California the average price of a gallon of self-serve regular is $3.93 — the highest price in country. About 25 percent of the state's gas stations are still charging $4 or more, according to the Oil Price Information Service.

In Los Angeles County, however, the average price of a gallon of self-serve regular gasoline fell Sunday to its lowest amount since Feb. 10, dropping 2 cents to $3.85.

• For the lowest gas prices in the area, click the Commute tab at the top of this page.

The average price has decreased for 39 consecutive days and is 14.4 cents less than one week ago, 48.2 cents lower than one month ago and 3.2 cents below what it was one year ago, according to figures from the AAA and Oil Price Information Service.

The falling pump prices are the result of lower crude oil prices stemming from lower demand caused by a slowdown in the global economy, according to Jeffrey Spring of the Automobile Club of Southern California.

Crude oil costs account for two-thirds to three-quarters of the price of a gallon of gasoline, said Tupper Hull of the Western States Petroleum Association, a trade association representing oil companies in six western states.

Prices are well below the fanned earlier this year by energy speculators, Middle East tensions and oil refinery glitches that crimped supplies, USA Today reported.

"Demand just isn't there," Brian Milne of energy tracker Televent DTN told USA Today, noting an Energy Department report that demand for fuel over the past four weeks has fallen 5 percent below year-ago levels. "It's been dreadful."

Barring supply disruptions heading into hurricane season which helped drive pump prices to an all-time high in July 2008 — tropical storm Debby is already stalled in the Gulf of Mexico impacting oil platforms — consumers could soon be filling up at prices not seen since December 2010.

Not everyone sees gas prices dropping as sharply or for a prolonged time. Energy trader Dan Dicker told USA Today that he expects crude oil prices to bottom out at about $75 and gas prices this year to bottom around $3.30.

"The fundamentals are all bearish, but we've seen lower prices every fall for the past four years, then see prices start to rise again," Dicker says. "This year, the major wild card is a European economic collapse."

-- City News Service contributed to this report.

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