Gasoline prices could dip to $2.50 by Christmas

Source: By: Darren Goode, Politico • Posted: Wednesday, December 3, 2014

The average price of regular gasoline could drop as low as $2.50 a gallon by Christmas, according to AAA.

Gasoline prices have already fallen for 67 straight days, the longest streak since the drop during the financial collapse in 2008, when they retreated from a record high that summer.

And Monday’s average of $2.77 a gallon — four cents lower than a week ago, 23 cents less than a month ago and 50 cents less than one year ago — may not be close to the price bottom this year.

Gasoline prices “may make a real run at a $2.50-$2.60 national threshold, which would be pretty wild given what we’re seen over the last couple of years,” said Avery Ash, AAA’s director of federal relations. AAA is already projecting that the national average this Christmas will likely be the lowest since 2009.

The national average has dropped 58 cents during the last 67 days and is at the lowest point since Oct. 7, 2010. The year-over-year discount is also at its widest mark since Oct. 17, 2009, Ash said.

Oil prices extended their declines after OPEC’s decision last week to leave its production levels unchanged.

“This week will be a really telling one as far as how the market really reacts” to OPEC’s move, Ash said. Do prices have the ability to stay comfortably low, “or do we see prices have a bit of a bounce?”

Gasoline in 42 states is averaging below $3 a gallon, and it’s likely that by the end of next week only Hawaii, Alaska, New York and Connecticut will be above that threshold, Ash said. And gasoline in New York and Connecticut may slip below $3 a gallon in the next couple of weeks, he said.