Gas price drop: Closing in on $3

Gasoline prices are within 25 cents of $3 but remain some 19% above year-earlier levels.

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By, Catherine Tymkiw, producer

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NEW YORK (CNNMoney.com) -- Gasoline prices extended their slide, dropping more than 4 cents a gallon and coming within 25 cents of breaching the $3 level, according to a daily survey of credit card swipes releases Sunday.

The average price of unleaded regular fell to $3.247 a gallon nationwide, down 4.4 cents from $3.291, according to the Daily Fuel Gauge Report issued by motorist group AAA. That brings the two-day total decline to 10.3 cents.

The decline comes as hurricane season winds down and oil prices drop because demand is likely to weaken as the economy slows.

Gas prices dropped a record amount in the last two weeks, falling by more than 35 cents a gallon, the publisher of a separate survey said Sunday.

Trilby Lundberg, publisher of the nationwide Lundberg Survey of gasoline prices, said the average price for self-serve unleaded across the United States dropped to $3.31 a gallon - the largest decline in the six-decade history of the survey.

"This could be one the largest drops in history," Lundberg said.

Lundberg's survey looks at about 5,000 gas stations around the nation, tallying an average gas price for regular-grade unleaded gasoline.

Before the latest survey, the record drop tallied by surveyors came after Hurricane Katrina in October 2005, when national gas prices dropped 25 cents a gallon, Lundberg said.

The price has now tumbled nearly 87 cents, or 21%, below the record $4.114 set July 17. And it's down about 43 cents from a month ago, but still remains some 49 cents, or 19%, higher from a year ago.

The average price has dropped below $3 a gallon in six states: Iowa, Kansas, Minnesota, Missouri, Ohio and Oklahoma, where gas was selling for $2.83 a gallon, on average.

Gasoline is highest in Alaska, at $4.133 a gallon, with Hawaii - at $4.079 - the only other state above $4 a gallon.

Gasoline prices had surged during the highly traveled summer season and as a series of hurricanes battered oil refineries in the Gulf of Mexico. But with hurricane season nearly over, prices began their slide.

Oil prices also have been moving sharply lower amid fears that the economic crisis, which has deepened globally, will have a severely adverse effect on demand.

Crude plunged to a 13-month low on Friday, ending down $8.89 to $77.49 a barrel. That's a far cry from the $147.27 a barrel seen in July.

And since oil prices make up about half of the price of gasoline, the slide in crude S good news for drivers.

The survey is conducted for AAA by Oil Price Information Service from credit card swipes at more than 85,000 service stations nationwide.  To top of page

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