The price of a gallon of unleaded regular gasoline has dropped to its lowest level since the second week of July, with cheaper prices yet to come, according to predictions rendered by GasBuddy.com this morning.
The U.S. average price for gasoline stood at $3.488 gal Monday morning, about 33 cents per gallon lower than what was recorded on this day last year. GasBuddy analysts stress active shoppers who download the free GasBuddy app can save about 20 cents per gallon in most markets if they choose to aggressively shop for the cheapest gasoline in their zip codes.
Eight states now find at least a smattering of retail gas offers of less than $3 per gallon. That list, which could expand to a dozen or more states this week, currently includes South Carolina, Mississippi, Texas, Tennessee, Virginia, Louisiana, Georgia, and Oklahoma. Several other states, including Arkansas, Alabama, New Mexico, Indiana, and New Jersey find competitive offerings at $3.05 gal or less.
There is great diversity even in relatively high priced states. California prices average $3.96 gallon (compared with $4.12 gallon a year ago) but there are a number of locations where motorists can purchase fuel for $3.60-$3.65 gal.
Only one state — Hawaii — has an average price level of above $4 per gallon.
GasBuddy Chief Oil Analyst Tom Kloza predicts that autumn will see slow but steady attrition in retail gas numbers, thanks to record high U.S. refining rates and consumer demand that will at best match autumn 2012 levels. Supplies are adequate, and indeed gasoline now typically sells for just a few dollars more than raw crude costs.
There are two wild cards in the autumn gas forecast, Kloza notes. North American and global crude oil prices reflect a “fear premium” that has kept benchmark crude costs well above $100 bbl. If that fear eases, lower raw costs might ensue and bring gas values below the $3.21-$3.25 per-gallon bottom that occurred in autumn 2012. The second wildcard involves ethanol. Prices for ethanol are currently just a few cents below gasoline costs, but ethanol can be purchased for up to $1 gal less than gasoline in forward markets. Since ethanol represents 10 percent of the motor fuel formula in most states, a slide in prices could tilt autumn and winter finished gasoline blends even lower.