How low can gas prices go?

There's good news at the convenience store pump: Labor Day is over, which traditionally means gasoline prices will go down.

The national average price for gasoline has been falling through August, when it usually rises. In Sebring, the lowest price for regular steadied at $2.62, in Avon Park, a gallon of unleaded sunk to $2.54.

Now the crucial question: how low will it go?

A plunge in wholesale gasoline prices earlier this month continues to push down prices at the pump, PFGBest analyst Phil Flynn told the Associated Press. Gasoline supplies are nearly 12 percent above the five-year average, and demand is below pre-recession levels.

"We're going into the weakest demand period of the year," Flynn said. Crude oil was selling for $75.14 at mid-day Wednesday, $8 lower than its month-ago high.
In addition, consumers are still watching their dollars carefully, unemployment remains high, and the national economic recovery is lacking.

"Consumers won't see much of a change in retail gas prices this week, but it's very possible we could see a more significant decline next week," said Jessica Brady, manager of AAA public relations. "Typically, after Labor Day, consumer demand drops and refineries begin a maintenance period as they start to prepare the switch in production from the summer blend fuel to the winter blend. The winter blend fuel is less expensive to produce."

When crude prices are in the $70s, $2.25 is as low as gasoline will go, said Prof. Brad Kamp at the University of South Florida. To sell $2 gas, a barrel of crude would have to go for $65. "And I don't anticipate that," he said.