Gas Prices Dropping, Could Hit $2 a Gallon

WASHINGTON (McClatchy Washington Bureau/TNS) -

Gasoline prices are expected to drop sharply this month, and may approach $2 a gallon in much of the country by the time winter’s chill arrives.

Normally, pump prices are flat or even up a bit in August as Americans finish up the summer holidays with a road trip before sending the kids back to school. This year, however, the AAA Motor Club anticipates a drop of 15 cents or more in coming weeks, on top of what already has been a sharp drop from this year’s peak.

“In many ways, it’s a very simple prediction, based purely on the (price) decline in crude oil,” said Michael Green, an AAA spokesman.

Conflict in the Middle East, a disruption to U.S. drilling or a refinery outage could always push up oil prices, thus reducing the chances that gasoline will fall as predicted.

“On the other hand, if oil prices continue to fall and operations continue to run smoothly, you could see even larger drops in (the gasoline) price,” said Green.

How large?

“Many parts of the country could see gas prices near or below $2 a gallon by (the last week of December),” he said. “The states that are most likely are in the southwest and central United States, places where gas is already cheap.”

South Carolina and Alabama led the nation Tuesday with the cheapest average price for a gallon of regular unleaded gasoline, at $2.26, followed closely by Mississippi and Ohio, both at $2.30.

Motorists in California and Alaska paid the highest prices, respectively, at $3.71 and $3.48 a gallon. The national average Tuesday was $2.64 a gallon, down sharply from $3.50 a gallon a year ago.

Gasoline prices are falling even as Americans are driving at what appear to be record levels. The Federal Highway Administration’s most recent update on vehicle miles traveled shows that through May, motorists in the United States had logged 1.26 trillion vehicle miles of travel — a record for the first five months of any year.

The agency predicts that Americans for the year will travel 3.08 trillion vehicle miles. That would be a record, slightly edging out the vehicle miles logged in 2006.

There’s another reason to expect lower prices: U.S. oil and gasoline supplies keep growing even as demand across the globe wavers.

China’s unexpected economic slowdown has lowered demand for oil, as has the prolonged economic weakness across Europe and even in big emerging markets such as Brazil. It all adds up to weak global demand, even as the U.S. motorists and boaters drink up more fuel.

Crude oil traded between $99 and $102 a barrel in late July 2014. Late last month, the price wavered between $48 and $49 a barrel.

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AAA’S FUEL GAUGE REPORT

Gas prices by state on Aug. 4, 2015:

California $3.715

Florida $2.502

Georgia $2.492

Idaho $3.000

Illinois $2.622

Kansas $2.512

Kentucky $2.406

Missouri $2.447

Mississippi $2.300

North Carolina $2.465

Pennsylvania $2.719

South Carolina $2.262

Texas $2.447

Washington $3.173

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Gas prices by city:

San Luis Obispo, Calif. $3.922

Fresno, Calif. $3.461

Merced, Calif. $3.443

Modesto, Calif. $3.296

Sacramento, Calif. $3.322

Fort Worth, Texas $2.416

Boise, Idaho $2.998

Raleigh, N.C. $2.453

Charlotte, N.C. $2.493

Miami $2.627

Bradenton, Fla. $2.497

Kansas City, Mo. $2.407

Wichita, Kan $2.391

Biloxi, Miss. $2.281

Bellingham, Wash. $3.147

Olympia, Wash. $3.160

Tacoma, Wash. $3.159

Yakima, Wash. $3.124

Columbia, S.C. $2.227

Myrtle Beach, S.C. $2.244

East St. Louis, Ill. $2.724