The statewide price for a gallon of gas has fallen to $2.99, the first time it's been under 3 bucks since late February -- and all indications are that it's heading even lower. An increasing number of experts think these low prices could extend well into next year and maybe into 2017 as the worldwide glut of oil shows few signs of easing.
"Many of us share that thought," said Allison Mac of Gasbuddy.com, which tracks pump prices in the United States and analyzes global trends. "Oil prices should remain low for the next couple of years unless the Saudis decide to take a hit and pull back production."
She's far from alone. Severin Borenstein, chairman of the state's Petroleum Market Advisory Committee, said prices remaining low is possible, what with oil markets predicting only "a gradual upward drift over the next five years." And Greg Priddy, director for global energy and natural resources at the Eurasia Group, said "the world is still going to be oversupplied through 2016, and it's not going to be until 2017 that you actually have the bloated inventories come down."
The California average as of Sunday, according to AAA, remains considerably higher than the national average of $2.29 a gallon. The state's figures are inflated by higher prices in Southern California because of an explosion at the Torrance refinery in February: $3.32 in San Luis Obispo, $3.13 in Los Angeles, $3.10 in Santa Barbara and $3.07 in San Diego.
But in the rest of the state, fill 'er up -- and don't fret about maxxing out your debit card. It's $2.66 in Chico, $2.67 in Modesto, $2.73 in Sacramento, $2.86 in Vallejo, $2.90 in Santa Cruz, and $2.92 in both San Jose and Oakland.
Want really cheap? The California city with the lowest price is Yuba City, with $2.56.
San Francisco is the only Northern California city to register above $3 -- at $3.07 -- but that is low for the city, which usually has the most expensive gas in the state. On Saturday, some stations throughout West San Jose and Campbell lowered prices by 12 cents overnight to $2.67, a major drop that will not be reflected in the statewide analysis for another day or two.
Motorists are pleased, but they know enough about the vagaries of gas prices to not make any lifestyle changes.
"I'm happy but not doing cartwheels -- just accepting graciously the temporary benefit for my budget," said Mike Brady, who paid $2.50 for regular gas at an Arco in Folsom recently. "I'm not going to buy an SUV just because the price has gone below $2.50 temporarily. Because the price will go up again early next year, from any of a number of causes."
Energy analysts predict that California prices will fall perhaps an additional 50 cents by Christmas and to less than $2 a gallon across the nation. Nearly 1 in every 4 stations nationally already is selling gas for less than $2 a gallon, the most since 2004.
Bloomberg News reported that oil prices were down more than 25 percent in June on speculation that the global glut will be prolonged. U.S. crude stockpiles remain almost 100 million barrels above the five-year seasonal average. Iran has 30 million barrels of oil ready to be released and could soon be pumping 4 million barrels of crude daily into the market as sanctions are lifted as part of the nuclear arms deal.
It's still wise to shop around. After Bob Conlon returned from a trip to New Jersey, where he paid a measly $1.99 per gallon to fill his rental car, he found himself forking over $3.09 in his hometown of San Ramon.
Why, he asked, was he paying more than a dollar more here, knowing full well that the state's clean-burning gas is at the root of the huge price gap?
"It must be the weather-premium" gas, Conlon said.
But it's a far cry from $4.67 a gallon, the single-day state record set Oct. 9, 2012. That's in Californians' rearview mirror, maybe for many years.
The Associated Press contributed to this report. Join Gary Richards for an hourlong chat noon Wednesday at www.mercurynews.com/live-chats. Follow Gary at Twitter.com/mrroadshow, look for him at Facebook.com/mr.roadshow or contact him at email@example.com or 408-920-5335.
Hundreds of readers submitted entries for Mr. Roadshow's contest to guess what the statewide average for a gallon of gas will be Oct. 1. Once the exact price is recorded by AAA, Gary "Mr. Roadshow" Richards will determine the winner, who will get a free tank of fuel. Watch for the news in print or online at www.mercurynews.com/mr-roadshow.