Gasoline prices in the United States fell an average of $0.17 a gallon from July 1 to July 31. Since then, the average price has fallen nearly another $0.05 per gallon to an average of $3.465 per gallon across the country on Wednesday morning.

According to data reported by GasBuddy.com, none of the lower 48 states has a gasoline price above $4 a gallon, and in eight states the price has dropped to $3.25 a gallon or less.

The eight states with the lowest priced gasoline are South Carolina ($3.14), Alabama ($3.19), Mississippi ($3.21), Tennessee ($3.22), Louisiana ($3.23), Arkansas ($3.24), Virginia ($3.24), and Oklahoma ($3.25).

WTI crude for September delivery closed at $97.37 on Tuesday and has moved up by a penny so far Wednesday morning, as analysts polled by Platts anticipate the weekly petroleum status report from the U.S. Energy Information Administration (EIA) to show a drop of 2 million barrels in the nation’s crude oil inventories. The American Petroleum Institute (API) reported last night that inventories rose by 2 million barrels in the week ending August 8.

Regardless of which estimate turns out to be closer to the EIA figure, the price of gasoline is expected to continue its downward trend. The weekly decline noted by GasBuddy.com is about a penny.

The International Energy Agency (IEA) on Tuesday trimmed its demand growth forecast for 2014 to 1 million barrels a day and the growth forecast for 2015 to 1.3 million barrels a day, down from prior estimates for 2014 demand growth of 1.2 million barrels a day and 2015 growth of 1.4 million barrels a day.

The turmoil in Iraq, Libya, and Nigeria has not resulted in a sustained rise in crude prices, and refinery runs continue to reach levels above 90% of capacity in the United States. The EIA updated its Short-Term Energy Outlook on Tuesday and reported that U.S. crude oil production in July totaled 8.5 million barrels a day, the highest level of monthly production since April 1987. The EIA expects U.S. production to rise to 9.3 million barrels a day in 2015, 800,000 barrels a day above the 2014 daily average.

Where will gasoline prices hit the floor? A national average at around $3.30 a gallon by the end of the year is likely and the price could fall even below that level. Demand will slacken somewhat after Labor Day, and prices might rise slightly as refineries switch over to producing winter fuel, which is typically cheaper than the summer-grade fuel U.S. drivers have been burning since May.

ALSO READ: 10 States Struggling With Delinquent Debt

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.