WASHINGTON -- The likelihood of finding $2-a-gallon gasoline in some parts of the United States is increasing by the day.
The nationwide average at the pump is already below $2.50, and with a huge decline in oil and gasoline futures yesterday analysts say the outlook for motorists is only getting better.
``We'll see sub-$2.25 a gallon retail [prices] by October," said Tom Kloza, director of the Oil Price Information Service, adding that prices below $2 can already be found in Kansas, Missouri, South Carolina, and other states.
Oil prices sank by more than $2 a barrel yesterday to settle near a six-month-low as worries about supply threats eased and signs of economic weakness in the United States signaled a potential cooling of energy demand.
The sell-off brought crude oil futures to a six-month low, and helped weigh down already sinking gasoline prices.
``The real-time fundamentals of supply and demand are bearish," said Societe Generale analyst Mike Guido.
Global inventories of crude oil are rising and in the United States -- the world's biggest energy consumer -- demand is tapering off.
Pre summer fears that hurricanes would disrupt Gulf of Mexico oil production have so far not materialized.
Light sweet crude for October delivery fell $2.14 to $61.66 a barrel on the New York Mercantile Exchange, where gasoline futures tumbled 7.58 cents to $1.5038 a gallon.
It was the lowest close for front-month crude futures since March 21, when oil settled at $60.57. Oil prices have fallen 20 percent from a record settlement of $78.40 a barrel on July 14.