-- Enjoy it while it lasts. Gasoline prices fell another 17.6 cents the past week, with average prices in three states dipping below $2 a gallon.
But prices appear to be nearing a bottom, with both crude oil and wholesale gasoline prices showing signs of stabilizing.
"You'll probably see another 10-cent (drop), maybe another 15 cents" the next few weeks, then prices remaining at that level, says Fred Rozell, gas-price expert at Oil Price Information Service (OPIS).
The nationwide average price for a gallon of regular gasoline was $2.22 Monday, down 17.6 cents from last week and 43 cents the past two weeks, according to the Energy Information Administration's weekly survey. Pump prices haven't been so low since February 2007.
The West Coast had the highest prices, at $2.53 a gallon. Gas was cheapest in the Midwest, at $2.06.
Gas prices have now fallen $1.61 since Sept. 15 and $1.89 since setting a record at $4.11 on July 7. Since Friday, average prices have slipped below $2 to $1.97 in Ohio, $1.96 in Oklahoma and $1.93 in Missouri, according to AAA.
Meanwhile, diesel fuel prices sank 14.4 cents the past week to $2.94, creeping below $3 for the first time since September 2007, EIA says.
Both gasoline and crude oil have plummeted amid a global economic downturn that's stifling demand from consumers and businesses. Yet crude oil has traded between $60 and $70 a barrel in recent weeks, a sign that prices might not have much further to fall, Rozell says. DTN analyst Darin Newsom agreed, noting that wholesale gasoline prices also have stabilized at $1.30 to $1.40 a gallon.
Crude settled up $1.37 Monday on the New York Mercantile Exchange at $62.41 a barrel.
Another sign a bottom might be near is OPEC's willingness to trim oil production to prop up prices. OPEC recently slashed output by 1.5 million barrels a day and hinted that further cuts may be coming. "It's getting to a point where you'll see a lot more cutbacks with OPEC," Rozell says.
Pump prices should hover in the $2 range for several months, falling as low as $1.75 in some markets, says Tom Kloza, chief oil analyst for OPIS. But don't expect a sustained period of low prices reminiscent of the 1990s, he says. Although demand is weak, it's expected to pick up during next summer's driving season, and oil supplies are likely to remain tight for years.
Kloza expects gas prices to jump about 75 cents in spring 2009, though he's not predicting a return of $4 gasoline soon. "I wouldn't be surprised to see a lot of prices north of $3" in six months, he says.