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Retail gasoline below $3.45 a gallon, prices could drop as low as $3.25 by winter
NEW YORK (AP) ' Retail gasoline prices have dropped about 50 cents a gallon since the spring, and motorists could see them slide another 20 cents before the end of the year.
The national average, which slipped to $3.446 per gallon on Tuesday, should continue to fall at least through the new year, according to the Energy Information Administration.
"There's a lot of relief at the pump," said Patrick DeHaan, a senior petroleum analyst at GasBuddy.com. DeHaan expects pump prices to fall as low as $3.25 per gallon by the end of the year.
Prices have declined for a few reasons: Motorists drive less in the fall than in the summer, and refineries are allowed to make lower-cost winter fuel blends.
Compared to last year, motorists are buying much less gasoline. MasterCard SpendingPulse, which tracks retail gasoline purchases in the U.S., says drivers have cut back at the pump for nearly eight months in a row.
MasterCard's latest survey is due out later on Tuesday.
Experts say motorists are cutting back because they can't afford to buy more. Prices flirted with $4 per gallon in May, and a gallon of regular is still about 63 cents higher than it was a year ago. Overall gasoline is expected to be at a record average high of $3.52 per gallon this year.
Meanwhile, benchmark crude on Tuesday rose $2.60, or 2.9 percent, to $93.86 per barrel in New York. Brent crude, which is used to price oil from foreign countries, fell 21 cents to $111.24 in London.
Benchmark West Texas Intermediate crude is now at the highest level it's been since early August. That likely won't affect gasoline prices, however, because of a drop in Brent prices. U.S. refineries rely more on Brent than WTI to produce gasoline.
In other energy trading, heating oil and gasoline futures were essentially flat at $3.0568 and $2.6647 per gallon, respectively. Natural gas rose 6 cents to $3.663 per 1,000 cubic feet.