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Gas prices keep falling -- how low can they go?

If you were one of the nearly 47 million Americans who traveled the nation's roads over the Thanksgiving holiday weekend, you might have been pleasantly surprised by the continuing drop in gasoline prices at most pumps around the country.

Or, as Patrick DeHaan as blogged on Monday, U.S. gas prices "now stand within a penny of hitting their lowest levels since the Recession." According to AAA, over the extended break U.S. drivers paid the lowest gas prices during a Thanksgiving holiday since 2008. The organization also notes the national average for a gallon of gas, as of Monday, is $2.04, close to the multi-year low reached this past January.

Gas prices have been declining for the past 24 days, with the national average for a gallon of gas expected to fall below two dollars by Christmas. AAA says average gasoline prices in 22 states are already below $2 per gallon. Across the U.S., motorists in Michigan, Missouri and Ohio pay the least for gas, at an average of around $1.81 a gallon. But prices at some gas stations can be even lower, such as the $1.41 that drivers payin Lafayette, Indiana.

At the other end of the spectrum, people in Hawaii, California and Nevada pay the most at $2.81, $2.70 and $2.53, respectively.

Several factors explain the continuing drop in prices at your local gas pump.

Gasoline prices are, of course, influenced by fluctuations in global oil prices And so far, despite tensions between Russia and Turkey and a range of scary geopolitical news, the international oil market has remained fairly steady.

The recent North American shale oil boom has helped to push crude oil prices down by around 60 percent since June of last year. And, as the U.S. Department of Energy noted late last week, "oversupply and a strengthening U.S. dollar continue to impact global oil markets, keeping downward pressure on the price of crude oil."

The Organization of the Petroleum Exporting Countries (OPEC) is scheduled to meet in Vienna on Friday. But despite the high international inventories of oil and relatively low price of crude, observers expect the cartel to maintain its current production levels. That policy is hurting OPEC members, whose economies depend on petro-dollars.

Still, some traders are apparently hoping for news of a production slowdown from OPEC. Just before noon on Monday futures for Brent crude were up 59 cents at $45.45 a barrel, while futures for West Texas Intermediate, another benchmark oil, were up 55 cents to $42.26.

Karr Ingham, a petroleum economist for the Texas Alliance of Energy Producers, thinks crude oil prices may be bottoming out, but he also believes two different scenarios might unfold over the next several months.

"One is we stay where we are for a while until things stabilize -- we absorb this overproduction, which means gasoline prices, depending on your state, stay roughly where they are now, maybe a little bit lower," he said.

The other possibility is that oil overproduction means producers "max-out" storage facilities in the U.S., which in turn further reduces overall crude oil prices.

"Is $1.86 or $1.90 [per gallon of gas] where we land in terms of a national average?" he asks. "I must say it doesn't seem out of the question for me at this point."

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