Already Cheap Gas Prices Are About to Hit Rock Bottom

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Prices at the pump sometime head in the exact opposite of the trajectory forecast by analysts. But this autumn, gas prices are steadily plummeting, just as predicted, recently hitting a low for the year.

Drivers should hope that analysts keep getting it right, as forecasts call for continued decreases in gas prices in the months ahead. According to the AAA’s Fuel Gauge Report, the national average for a gallon of regular stood at $3.275 as of Friday. That’s nearly 25¢ cheaper than the average of a year ago at this time, and it’s just under the previous low for 2013, measured at $3.29 in early January.

It’s expected that prices will keep falling as the end of 2013 grows nearer. AAA is forecasting a national average of $3.10 by year’s end, which would be the lowest price since February 2011.

Sub-$3 gas has already been popping up around the country at more and more gas stations. About 10 days ago, USA Today reported that gas for under $3 per gallon had already appeared in 24 states. As of Friday, only one state was averaging under $3 (Missouri), but seven states mostly in the heartland are under $3.10, and AAA anticipates that the average in as many as ten states could dip below $3 by Christmas.

Speaking of which, some say that gas prices could have a significant impact on the all-important holiday shopping period. Thanks to the federal shutdown and general unease about the economy, among other factors, retailers are expected to have a lackluster holiday season. But the hope is that lower prices at the pump will boost holiday spending. Cheaper gas prices help workers hang onto more of their money—at least, that is, until they spend it online or at the mall while rounding up holiday purchases or perhaps engaging in some “self-gifting.”

(MORE: Hey Thanksgiving Shoppers, Macy’s Isn’t the Only One to Blame for Ruining Thanksgiving)

“We all benefit — from lower gas prices and job creation,” Phil Flynn, senior market analyst at Price Futures Group, told MarketWatch in a story noting America’s rising crude supplies and the likelihood of $3 gas making more appearances throughout the U.S. “We will be less impacted by problems in the Middle East and it will make other countries less likely to use oil as a political weapon.”

However, not everyone is sold on the idea that cheaper gas prices will directly translate into increased consumer spending and the return of boom times. In a period of flat wages, frustration with the government, and low confidence in the economy, “consumers are grumpy,” Tom Kloza, chief oil analyst with the gas price-tracking site Gas Buddy, told CNBC. “They’re not gonna drive more,” even if gas prices drop by another 10% or so. “They’re not gonna take more vacations.”

They may not suddenly decide to go hog wild on holiday purchases either.

18 comments
FranBertrand
FranBertrand

how long will these nice low prices last...

jhroseburg
jhroseburg

Now if we could only get Grocery Prices down from the 47% increase in the last two years, we might be getting somewhere...Everything keeps going up except wages!!

MaggieHarris
MaggieHarris

I don't understand last week i saw gas prices at 3.02 a gallon for regular. Then 2 days later it's back up to 3.39.  Why is it they raise the prices at the end of the week when that's the only time people have the time to do something.They string us around like puppetts, and they say this is a free country.

Champagne
Champagne

Obama is a devious, manipulative puppet. 5 years of this dope and look at this country today. We've been duped!!! What a mistake I made when I voted for this mannequin. This country is unbalanced and disconnected; utter confusion to state the least.  

ran6363
ran6363

Ah yes....I get it now

$3.50 gas + 8% unemployment + democrat president = GOOD TIMES

$1.90 gas + 4% unemployment + republican president = GREAT DEPRESSION

Yoshi
Yoshi

$3? Cheap?  Ahahahahahahahahahahahahahaha!

jdrch
jdrch

As the driver of a premium gasoline car, I'm certainly not complaining

rcrainey@yahoo.com
rcrainey@yahoo.com

already cheap gas prices . Are you serious!!!!!!!!!!!!!!!!!! that's like saying that the government is honest. Really!!!!!!!!!!!!!!!!!!!

Raggedhand
Raggedhand

I filled up yesterday at a quickie-mart (central Texas) for 87 octane at $2.95/gallon. Since I drive a subcompact and only put on about 700 miles a month, I only fill up about once every 3-4 weeks and hadn't noticed the prices going down. As I was pumping I was thinking to myself how cheap gas was getting now. What occurred to me was that three DECADES ago I was paying $1.62/gallon and with inflation and the cost of living going up, that would like paying over $5 a gallon now. Even today, compared to Europe, we pay amazingly low prices for fuel.

UnverifiedDave
UnverifiedDave

@Yoshi ironic that you would use a Japanese name when gasoline in Japan is about $6/gallon

Champagne
Champagne

@jdrch Morons are born every minute. I believe you fit into that category.

eagle11772
eagle11772

@Raggedhand Lowest I seen is $3.18 here in southern Arizona.  Of course thats a far cry of $0.28 (28 cents) per gallon I remember years ago.  Why so much Obama says it's "BUSH'S FAULT !"

Yoshi
Yoshi

@UnverifiedDave @Yoshi Good thing I'm not a native. I was born here in the US. There aren't many cars in the family over there, though. It's not just the gas that's expensive over there

jdrch
jdrch

@Champagne ? I'm happy for lower gas prices, not sure where you're going with that argument.