US: AAA sees gas falling below $3 for holiday period image

According to Heathrow, Florida-based motoring club AAA, US drivers could get an early Christmas present as gasoline is continuing its depreciation and the forecast is that it could hit $3 per gallon in time for the holidays.

The AAA said that last week the gasoline that should be delivered in November has fallen to $2.2575 a gallon on the New York Mercantile Exchange – the difference to the pump price being of 98.25 cents. That’s the first time the gap widens to one dollar since October 2012 and the futures, which play a part in the overall retail costs, are also down 40 cents. In the past two weeks, the average price across the US at the gas pumps has also gone down 10 cents.

Michael Green, an AAA spokesman in Washington says the outcome favors a further drop in the gasoline price across the nation, with the group forecasting retail prices would go down to $3.10 a gallon and might even fall to $3 in time for the start of the December holidays.

Green added that gasoline futures dips need around two to three weeks to reach pumps as owners of gas stations wait to see if the lower prices have a tendency to remain there – after which competition would trigger the price reduction. According to figures from AAA, the October 9 US average gas retail price was at an average of $3.24 a gallon.

Via Bloomberg