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$3 a Gallon for Gas? In some Areas, It's Already Here

12:58 PM, Apr 6, 2013   |    comments
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Here's a spring break we can all enjoy: lower gas prices.

At a time when gas prices traditionally rise, they continue to slide, even as the nation heads into peak summer driving season.

Nationally, prices now average $3.61 a gallon. That's a 12-cent drop from early March and 33 cents below $3.94 a year ago, when prices were close to a 2012 peak. And despite record-high averages in February, motorists paid an average $3.54 a gallon in the first quarter, vs. $3.58 in the first quarter of 2012.

Consumers in some regions of the Rocky Mountains - close to relatively cheap North American crude oil near to refiners - are filling up on sub-$3-a-gallon gas. In Montana, which averages $3.37 a gallon, prices in some cities, such as Great Falls, are in the $2.90s. Casper and Cheyenne, Wyo., had average prices below $3 for the entire quarter.

"We'll probably see more markets with $3-a-gallon gas next week,'' says Tom Kloza, chief oil analyst with the Oil Price Information Service and GasBuddy. Among the likely areas: South Carolina, Tennessee and Georgia.

GasBuddy analyst Patrick DeHaan estimates that each penny per gallon saved means savings of about $108 million a day over year-ago prices. The price-tracking Internet app tracks prices at more than 140,000 gas stations.

Crude oil prices continue to slide. Benchmark West Texas Intermediate crude fell to a two-week low of $92.70 a barrel Friday, ending the week down nearly 5%. Meanwhile, the Energy Information Administration says U.S. inventories were at a 22-year high last week.

Still, prices at the pump could be prone to spikes - as they did last year when refinery disruptions caused supply issues in California and the Midwest. But DeHaan and Kloza expect continued price weakness for the next few weeks. .

"The coast is not year clear for a 2013 top, but it was always nonsense to suggest that prices might vary from $4.25 to $5 a gallon,'' Kloza says. "That won't happen unless there is a disruption in the Mideast."

And despite the year-over-year price drop, there is still pain at the pump, based on historical trends. During 2009's first quarter gas averaged less than $1.90 a gallon and averaged less than $1.60 a gallon in the first quarter of 2003.

Highest current prices in the continental U.S: California, averaging $4.03, vs. $4.28 a year ago. Prices ranges in some markets has never been wider. GasBuddy says drivers in Washington, D.C., can save $1.14 a gallon shopping for the cheapest price available.

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