D.C. area gas prices falling quickly

Photo: Associated Press

You're not imagining it - gas prices are dropping like a rock.

For the 10th consecutive day, gas prices dropped on Thursday, with the national average dipping to $3.45 per gallon. That's down more than 20 cents month-to-date.

The sharp drops correspond to a similar decrease in the price of oil. Oil prices made small gains above $78 a barrel Friday but remained near eight-month lows after signs of slowing global economic growth triggered a sharp plunge this week.

By early afternoon in Europe, benchmark oil for August delivery was up 33 cents at $78.53 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $3.25 to settle at $78.20, the lowest since October, in New York on Thursday.

That has translated to a precipitous plunge at the pump. While the District of Columbia, where gas prices tend to run a little higher than in other areas of the region, is still higher than the national average at $3.54, drivers in Maryland are paying an average of $3.37 per gallon. In Virginia, it's even lower; the average price on Thursday rang in at $3.24.

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That leads some experts to believe that gas could be as low as $3 per gallon sometime this fall. It's a stark contrast to claims earlier this spring that per gallon prices could touch $5.

Crude fell from $84 earlier this week and has plummeted 26 percent in less than two months as signs mount of a slowdown in the global economy, led by Europe, that would reduce demand for crude.

"Until a permanent solution is found to the eurozone's problems, the global economy is likely to muddle through this crisis for a considerable while, and persistent bouts of risk aversion are likely to haunt the oil markets, making any sustained upside difficult," said analysts at Barclays Bank in London.