CEDAR RAPIDS, Iowa - The price of a gallon of gasoline dipped below $3 on Sunday at a southwest Cedar Rapids convenience store, potentially signaling a break for Corridor motorists.
The price of mid-grade fuel dipped to $2.98 at Kum & Go, 17th Avenue and Williams Boulevard SW. Similar prices were posted over the weekend at convenience stores in western Iowa, according to Harold Hommes, who tracks energy markets for the Iowa Department of Agriculture.
"Council Bluffs stations were the first that I heard of just below $3 a gallon," Hommes said. "The refiners are under a lot of pressure right now because crude oil prices are far from a bargain. They have to run their plants at 90 percent of capacity or greater.
"We're quickly approaching a season where demand will drop below 9 million gallons a day for domestic use. With the demand falling, they will have a great abundance of product to move.
"I think you're seeing a lot of competitive pressure right now for the sale that are out there."
The average price of mid-grade gasoline statewide was $3.29 per gallon on Monday, according to IowaStateGasPrices.com. The last time the average price of mid-grade gasoline dipped below $3 per gallon was about two years ago, according to Hommes.
Hommes said prices at the pump could fall even lower if demand continues to fall.
"I fully expect us to see prices dip below $2.90 before it's all over," Hommes said. "There may be a slight seasonal bump around the holidays, but nothing on the order we see during the summer vacation driving season."
U.S. crude oil slipped 81 cents to settle at $103.03 a barrel on Monday, after trading close to $2 a barrel lower at $101.86 earlier in the session. The contract slipped below the 100-day moving average of $102.45.
Hommes said the price of crude oil will eventually come down to more closely correlate with the retail price of gasoline.
"I think we will see a significant adjustment to crude values shortly," he said.
With the price of gasoline coming down, Iowans will see more cash in their wallet or bank account.
"What comes out of Iowans' pockets for fuel on a monthly basis is really significant," Hommes said. "This will free up a lot of dollars in the Iowa economy, so this is a very positive thing."
The average price for a gallon of gasoline in the United States fell 13.78 cents in the last two weeks, as refiners continued to pass on lower crude oil prices, according to the Lundberg survey released on Sunday.
The average price of just over $3.38 per gallon was down about 45 cents from a year ago, based on the Oct. 4 survey of some 2,500 retail stations in the lower 48 states.