November 12th, 2013
10:29 AM ET

Party like it's 2010: $3 gas by the end of the year?

Gas prices are the lowest they have been in two years and will continue to drop - possibly hitting $3/gallon by the end of the year, according to GasBuddy's Tom Kloza. But like real estate, gas prices are local. Six states already enjoy gas below $3.

It all comes down to the fundamentals: Crude oil prices account for around 71% of the cost of a gallon of gas. The conflict in Syria pushed oil prices higher, but the supply disruptions that would have accompanied a broader conflict never materialized. Crude prices have dropped 7% in the last month and analysts expect it to keep going down. Cheap crude from Canada and North Dakota, combined with a quiet hurricane season are also helping to keep oil prices and refining costs low.

Filed under: Gas Prices • Your Money
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