Speculators: Gas prices could dip below $3

June 22, 2012 at 11:23 AM
| License Photo

WASHINGTON, June 22 (UPI) -- American gasoline prices could drop below $3 a gallon by this fall, some energy speculators say.

The expectation of a continued drop in prices comes months after predictions that they could climb to $5 a gallon.

West Texas Intermediate crude oil fell 4 percent Thursday to $78.20 a barrel, the lowest price since early October, USA Today reported.

Gasoline prices have fallen for 11 straight weeks because of high oil inventories and low consumer demand.

Considering those factors, along with fewer wholesale gasoline contracts for fall delivery, "The market is suggesting gas below $3 by Halloween and certainly by Thanksgiving," said Tom Kloza of the Oil Price Information Service.

Energy trader Dan Dicker, though, said he doesn't believe gasoline prices will drop below $3.30 this year.

"The fundamentals are all bearish but we've seen lower prices every fall for the past four years, then see prices start to rise again," Dicker said. "This year, the major wild card is a European economic collapse."

Energy speculators had initially predicted higher gas prices throughout the summer due to Middle East tensions and oil refinery problems that had hindered supplies.

Related UPI Stories
Topics: Tom Kloza
Latest Headlines
Trending Stories
Nobel Prize in Chemistry awarded to DNA cell repair pioneers
Priest suspended after defending pedophilia in TV interview
U.S. asks how Islamic State militants got so many Toyotas
At least 17 dead in Carolinas, more flooding expected
NASA releases thousands of Apollo mission photos on Flickr