How would you like to pay less than $3 a gallon for gasoline by Halloween? That's not a trick question. The possibility of such a treat is real. Market analysts say the Wichita area could be seeing prices less than $3 for a gallon of regular unleaded by the end of October. Some parts of the country are already there.
Wichita's prices have dropped about 30 cents in the past month, including 20 cents in the past week. Wednesday's prices showed an average of $3.20 and as low as $3.15.
Factors in the decline vary, including the usual seasonal dip in gas prices as demand drops after summer traveling.
Demand is also down because of struggles in the global and domestic economies and stockpiles are up slightly, analysts say.
"That's the big picture," said Darin Newsom, a senior market analysts for the Omaha-based Internet trading firm Telvent DTN. "Wichita could be looking at sub-$3 gasoline by the end of October."
But while a 50 cents-per-gallon drop in gas prices over a year would add roughly $70 billion to the U.S. economy, that won't matter much if the worst economic fears come to pass, economists say.
That may be true, but Elvis Lindquist will take the cheaper prices at the pump.
"It's a matter of surviving today," he said.
Lindquist owns a transportation company in Emporia, which has 200 trucks on the road delivering parts for vehicles and equipment. Over the past month, he figures lower gas prices have saved him $5,000 daily.
The drop came in nick of time.
"The price of gas was putting me out of business," Lindquist said Wednesday while filling up his pickup at a Wichita gas station. "I know the global economy isn't good, but I'm driving down the road every day trying to make a living and keep other people employed.
"A global recession isn't going to affect us, if I'm not in business."
That approach is typical for most Americans, said Dean Headley, an associate professor for business and marketing at Wichita State University.
"You can worry about the economy all you want," he said, "but the average American can't do a lot about it. The best you can do is try to protect what you have."
Wichitans had to wonder if they were on the verge of $4 gas this year as prices hit $3.77 in May.
"This is more like it," said Richard Valenti, a petroleum engineer, while taking a walk down Douglas. "It needs to be around $3. It's good for the economy, because people will have more money to spend."
While the lower gasoline prices now are welcome, they remain historically high. Gasoline has averaged $3.56 nationally this year, the highest yearly average ever.
Gasoline is an uncertain commodity.
"It's a crap shoot trying to figure it out long term," said James Williams, who owns WTRG Economics, an Arkansas-based company that analyzes the energy industry and does forecasts.
West Texas Intermediate crude oil was at $81.21 per barrel at the close of Wednesday's trading, way down from a three-year high of $113.39 on April 29.
Unrest in the Middle East last spring, particularly in Libya, had driven up oil prices.
But Williams agreed that the short term shows gasoline prices will continue to drop through the end of the year.
"Barring another supply interruption, I think we will likely have lower prices," he added. "But it will be very erratic.
"The market is going to swing on every piece of news in Europe and the U.S. If you want a real guarantee of low (gasoline) prices, a second recession will do it."
Newsom arrived at his prediction for sub-$3 gasoline next month by looking at the October futures price.
The New York Mercantile Exchange showed it futures for gasoline at $2.65 per gallon. Newsom sees that dropping to $2.45 in October.
The pump price is usually 30 cents to 45 cents higher than the futures price, he said.
Gas has already dipped below $3 this week in parts of Michigan, Missouri and Texas. The national average Wednesday was $3.49, according to GasBuddy.com.
Some of that is driven by declining U.S. demand for gasoline, which is down 2 1/2 percent over the last month from a year ago, according to federal figures.
Patrick DeHaan, senior petroleum analyst at GasBuddy, says that while he expects the national average to fall to between $3.25 and $3.50 between now and Thanksgiving, some areas could hit $2.50.
The trend could reverse, analysts say, if the world economy does not descend into recession. That's because the growth in oil demand from China and other developing nations will more than make up for falling demand in Europe and the United States.
Americans have cut back driving in the face of high prices, but they are likely to spend more on gasoline in 2011 than ever close to $490 billion, according to Tom Kloza, chief oil analyst at the Oil Price Information Service.
"Whatever we see gas prices falling to, it won't be the new normal," Kloza said. "It will be a launching pad for winter and spring prices."