Crude oil prices fall again. Buckle up for gas prices below $3.

Crude oil prices just keep falling, and gas prices are following suit. Many analysts think the downward trend in oil prices will continue, driving the average price at the pump in the US below $3.00 a gallon.

Damian Dovarganes/AP/File
Costco members fill up with discounted gasoline at a Costco gas station in Van Nuys, Calif. US gas prices are on track to soon be at the lowest levels since 2010.

US oil prices fell nearly $2.00 Wednesday, extending a precipitous slide in crude prices that stretches back over the summer. It’s why analysts are predicting US gasoline prices could soon dip below $3.00 a gallon – the lowest price since 2010.

Motorists are already enjoying gas prices lower than any time since February 2011, according to data from automotive group AAA, as collapsed crude oil prices bring down the cost of refined gasoline. And some US drivers are already seeing prices below $3.00. Gas prices in Missouri averaged $2.77 on Tuesday, and more than a dozen other states have prices below $3.00 a gallon.

“Right now we see the national average at $3.09 a gallon,” says Gregg Laskoski, senior petroleum analyst at GasBuddy.com, a website that tracks gas prices across the US.

“It’s conceivable that the national average could get down to $2.95,” Mr. Laskoski adds in a telephone interview Wednesday. “Exactly when would that occur? That’s tougher to guess. It could be before Thanksgiving.”

Relief at the pump is the result of low crude oil prices, which have plummeted more than 20 percent from where they stood at the beginning of the summer. Before this summer’s price drop, crude prices had been hovering around $100 a barrel since 2011. Weak demand from China and Europe, as well as abundant supply from the US, are responsible for the recent and dramatic dip in prices, analysts say.

Crude prices remain just above $80 a barrel, though Laskoski says that crude oil inventories suggests prices may be on track to dip below the $80 mark.

“We’re well supplied,” Laskoski says, and that supply has well outstripped demand in a country that is driving fewer miles in cars that go farther on a gallon of gas.

Like this article?

Subscribe to Recharge, the Monitor's weekend digest of global energy news.
Click here for a sample.

Oil prices ticked back up Tuesday on reports that Chinese demand for oil isn’t as soft as expected. But US crude oil prices dropped $1.97 to settle at $80.52 Wednesday on news that US crude oil inventories last week were up 7.1 million barrels from the week before. That’s “near the upper limit of the average range for this time of year,” according to the latest US Energy Information Administration petroleum report.

Where US gas prices head depends heavily on oil prices. But with the supply and price of oil globally relatively stable, Laskoski says he does not expect much change in the downward trajectory.

Still, anything could happen, and observers are still wondering if falling oil prices have hit their floor.

“[W]hether we have hit bottom or not remains a question,” said Gene McGillian of Tradition Energy – an oil services advisory firm in Stamford, Connecticut – in an interview with Reuters Tuesday. “I would think not given the market's recent performance, the continued swoon of the European economies and the idea that we have more than ample supplies of oil sloshing around the world finding for a home."

US production has exploded since 2008, aided by technological advances in hydraulic fracturing and horizontal drilling that help producers extract oil deposits once thought un-reachable or too expensive to access.

And that shale oil boom has helped cushion crude oil and gas prices against geopolitical shocks.

“Because of that production, we didn’t see significant price hikes in both retail gasoline and crude oil prices when we saw the fall of Mosul in Iraq, problems with Russia and Ukraine, and air assaults to retaliate against ISIS,” Laskoski says. “These are events that in past years would have caused significant spikes.”

You've read  of  free articles. Subscribe to continue.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.