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NEW YORK -- Gas prices dropped nearly 3 cents to near $2.45 a gallon on average, according to a nationwide survey of filling station credit-card swipes released by AAA. As of Sunday, the average price of regular unleaded gas dropped 2.7 cents to $2.43 a gallon, from $2.46 a day before, the survey showed.
Gas last sold in the $2.50 range in mid-March 2007, according to a report by CNNMoney.com. The average price dropped below $3 a gallon on Saturday, Oct. 18, for the first time in nearly nine months. Gas prices have fallen for 46 straight days, shedding $1.41 since Hurricanes Gustav and Ike battered the Gulf Coast in September.
Unleaded is down $1.67, a drop of over 40 percent from a record high of $4.114 a gallon in mid-July. Prices are down in part due to the 50-percent drop in crude oil from its peak of $147 a barrel in mid-July to its current trading price of around $63 a barrel.
"[The price of] crude oil makes up about 70 percent 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. Toews 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," Toews told CNNMoney.com. "By December, it will be about $2.20," he added.
Americans are driving 5.6 percent 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 percent 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.
On a state level, gas remained above $3 a gallon in Alaska ($3.49) and Hawaii ($3.38), according to AAA, but of the lower 48 states, California had the most expensive gas at an average of $2.83 a gallon, followed by New York at $2.81 and Nevada at $2.71.
Meanwhile, the price of diesel fuel, which is used by most trucks and commercial vehicles, fell to a nationwide average of $3.26 a gallon, according to the AAA survey. The most expensive state for diesel was Hawaii, at an average of $4.79 a gallon, while the cheapest was Oklahoma at an average of $2.95.
The price of E85 ethanol declined to a nationwide average of $2.27 a gallon from $2.28 the day before, according to the AAA survey.