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Sunday, 8 December 2013

Gas under $3 – coming to a station near you

Nowadays it seems that oil price hike is never-ending but surprisingly it is becoming easier and easier to find gas for less than $3 a gallon.

The average price of a gallon of regular gas now stands at $3.19, according to AAA, after falling by about a penny a day for the last week. In the six states naming Missouri, Oklahoma, Arkansas, Texas, Kansas and Louisiana, the steady decline has taken the average price below $3 already. An additional six states are taking pleasure in an average price within a nickel of that standard and could drop below three dollars before long.

But $3 gas isn’t just limited to these 6 states.

According to the Oil Price Information Service, nearly 20% of gas stations nationwide are already charging less than $3 a gallon for regular gas. And those stations are selling far more than their share of gas.

“In almost half the states, you don’t need to make a great effort to find gas at $3 or less,” said Tom Kloza, chief oil analyst for OPIS, which compiles the price data for AAA, as well as for GasBuddy.com.

“To a great extent, the averages are really misleading,” said Kloza. “A large station with cheap prices might sell 750,000 gallons a month, while a small independent station with high prices might be struggling to sell 100,000 gallons.

The increased supply of low-price crude from Canada and North Dakota is a major factor sending gas prices lower, Kloza said.

“We’re seeing the cheapest crude on planet here,” he said.

What kept the gasoline inventories high were the quiet hurricane season and the lack of other disruptions at refineries.

For much of this year, the national average is by that time is below 2012′s low of $3.21, and has been averaging about 25 cents a gallon less than last year’s prices. Kloza estimates that gas prices will carry on to fall through the last part of 2013, and that more than half of states will have an average price below $3 a gallon ahead of Christmas, which is in general when prices bottom out for the year.

While high-price states like California and New York might keep the national average just above $3, Kloza said there is about a fifty-fifty chance that the national average could drop below $3 for the first time since late 2010.

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