Gas prices poised for a steep drop

The story behind oil's plunge
The story behind oil's plunge

Gas prices are down, and they are about to fall even further -- perhaps to less than $2 a gallon.

"There will be thousands, even tens of thousands of stations below $2 by the time we're into football season," said Tom Kloza, chief oil analyst for the Oil Price Information Service, which tracks retail prices for AAA.

Gas prices have dropped about 6% in the last month to $2.59 a gallon, while oil prices have plunged 16% in the same time period.

Gas hasn't fallen as much as oil partly because stations are required to sell a more expensive summer blend of gasoline through September 15 to meet environmental standards.But gas prices should see a steep drop once the less-expensive winter blend hits gas stations, Kloza predicted, and peak summertime demand tapers off.

Related: OPEC leader Saudi Arabia has to borrow money

Kloza thinks there will be a glut of gasoline come September and October. "If you have these crude oil prices in the autumn, you'd be looking at prices 60 to 70 cents lower than today," he said.

That could mean a repeat of last winter when the national average gas price hit a low of $2.03 in January, and most U.S. stations were selling gas for less than $2 a gallon. Today only 50 stations nationwide are below $2, according to Kloza.

Oil prices were about $45 a barrel, near their low for the year.

Oil is being pushed lower by concerns about a slowdown in Chinese economic growth, strong output from North America and the Middle East, as well as the tentative nuclear deal with Iran, which could bring more of that country's oil to the market.

Personal Finance


CNNMoney Sponsors