Speculators: Gas prices could dip below $3

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.