Gas prices continue to tumble across the U.S., leaving giddy motorists to wonder just how much lower they can go.
The nationwide average price for a gallon of regular grade gasoline fell Monday to $1.74 a gallon, more than a dollar less than it was a year ago, according to AAA. That is the first time drivers are paying an average of less than $2 a gallon since 2004, the U.S. Energy Information Administration (EIA) reports.
"For the first time since 2004, U.S. drivers are expected to pay an average of less than $2 a gallon for regular grade gasoline this year."
But drivers in many places are paying much less. That includes big cities, where gas prices are often higher. The average per-gallon price in Chicago dropped to $1.65 on Tuesday, according to GasBuddy.com. In Dallas, the average price sank to $1.55, and in Detroit it slipped to $1.48 a gallon.
In several cities in the Midwest and Plains states, however, prices have fallen below $1.30 -- even $1.20 -- a gallon. Oklahoma City; Parsons, Kansas; and Crawfordsville, Indiana, were just some of the cities where drivers reported paying $1.19 or less for a gallon of regular grade gasoline, according to GasBuddy.com's Gas Price Heat Map. In Springfield, Missouri, dozens of stations throughout the region were selling gas for around $1.25 a gallon.
The continued drop in prices at the pump has GasBuddy.com analyst Patrick DeHaan predicting the possibility of 99 cent per gallon gas in "competitive" areas in the Midwest, such as Toledo, Ohio, and Sparta, Michigan.
Last month, a gas station in Houghton Lake, Michigan, was selling gas for 47 cents a gallon after a price war broke out with other nearby retailers. Prices have since rebounded, with most stations in the community reporting prices of $1.36 to $1.40 a gallon, according to GasBuddy.com.
The steep and continued drop in gas prices is largely being driven by a glut of oil on global markets. "Lower crude oil prices, which have fallen more than 70 percent since the summer of 2014, are the main driver of cheaper gasoline prices," EIA AdministratorAdam Sieminski said in a statement.
Slower-than-expected growth in China, a strengthening U.S. dollar, and ongoing speculation about what, if any, deals OPEC may attempt broker on oil production are also contributing to lower crude prices.
Despite dramatically lower prices, U.S. refineries have yet to make any real cuts in production, leading analysts to forecast gas prices to remain low for some time.
California, however, remains an exception. Though gas prices in the Golden State are substantially lower than they were a year ago, the average price for gas is still $2.50 a gallon, 76 cents higher than the national average.
An explosion a year ago at a huge Exxon Mobil (XOM) refinery in Torrance, California, is largely blamed for keeping fuel prices high in the state, especially in the Los Angeles area. Repairs at the facility are ongoing, but the refinery isn't expected to return to full capacity until sometime in the second quarter.
Along with California, drivers in Alaska, Hawaii, Nevada, New York, Washington and Washington, D.C., also have yet to see the average price of a gallon of gas drop below $2 a gallon, according to AAA.
The motorists organization said gas prices typically start to rise in February, as refineries begin spring maintenance and ahead of summer driving season. Unlike previous years, however, gas and crude oil supplies are at record levels, and two volatile oil markets -- the Midwest and West -- are both reporting ample supply.
Those factors could result in continued low prices at the pump -- and lots of happy drivers.