Gas falls to $2.50 a gallon

Average gas price plummets to 19-month low, according to AAA.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Kenneth Musante, CNNMoney.com staff writer

If the U.S. enacts a second stimulus plan, what should be its top priority?
  • Extending unemployment benefits
  • Expanding food stamp program
  • Rebate checks to taxpayers
  • Help for small businesses

NEW YORK (CNNMoney.com) -- Gas prices lost more than 4 cents to sell near $2.50 a gallon on average, according to a nationwide survey of filling station credit card swipes.

The average price of regular unleaded gasoline dropped 4.3 cents to $2.504 a gallon from $2.547 a day before, according to the survey released by motorist group AAA.

Gas last sold in the $2.50 range in early March 2007. The average price dropped below $3 a gallon on Sat., Oct. 18, for the first time in nearly nine months.

Gas prices have fallen for 44 straight days, shedding $1.35 since hurricanes battered the Gulf coast in September.

Unleaded is now down nearly 40% from a record high of $4.114 a gallon in mid-July, down in part due to the 50% drop in crude oil from its peak near $150 a barrel in mid July to its current trading price of around $63 a barrel. "[The price of] crude oil makes up about 70% of a gallon of gas," said Jason Toews, co-founder of GasBuddy, a network of web sites that list local gas prices state-by-state.

He also attributed the price cuts to the end of the summer driving season, when demand for gasoline drops off. "We will see gas prices continue to fall," said Toews. "Even by the end of the weekend, it will be close to $2.40, and by December it will be about $2.20," he added.

Americans are driving 5.6% fewer miles than last year, according data from the U.S. Department of Energy. A weekly trade survey from MasterCard showed motorists consumed 6.4% less gas in the past week compared to a year ago.

But, Torres said, gas prices will likely start rising again in late January 2009 as driving starts to pick up again and crude oil prices bottom out. "There's only so far that crude oil prices can go. A lot of major oil fields are not profitable below $60 a barrel for oil," he said, referencing the Alberta oil sands, a rich deposit of oil in Canada that is expensive for oil companies to tap.

State prices: Gas remained above $3 a gallon in Alaska ($3.503) and Hawaii ($3.433), according to AAA, but of the lower 48 states, California had the most expensive gas at an average of $2.924 a gallon, followed by New York at $2.867 and Nevada at $2.80.

A total of 25 states had gas prices below $2.50 a gallon, according to AAA, with the cheapest average price found in Oklahoma at $2.14.

Other fuels: The price of diesel fuel, which is used by most trucks and commercial vehicles, fell 3.6 cents to a nationwide average of $3.316 a gallon, according to the survey. The most expensive state for diesel was Alaska, at an average of $4.425 a gallon, while the cheapest was Missouri at an average of $3.006.

Meanwhile the price of E85 ethanol, an 85% ethanol blend that can be used as a gasoline alternative in specially equipped "flex-fuel" vehicles, jumped 21 cents to a nationwide average of $2.30 a gallon from $2.09 a day before, according to the AAA survey.

The AAA figures are state-wide averages, and individual drivers may see lower fuel prices in different areas of each state. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
6 products to keep the skies friendly Plane travel can be stressful, especially during the holidays. These things can help keep the peace among travelers. More
2014: Helluva good year for stocks The bull market has been going for 2,115 days. If you put you're money in stocks, it's been a very happy year. More
7 up-and-coming foodie destinations These seven cities are seeing a growing interest in local food boost the economy -- and produce some seriously tasty eats. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.