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Gas prices plunging in the South Sound

Less than two weeks ago, $2.99-a-gallon gasoline made news in the South Sound. Now for bargain hunters, that price seems high.

Gas prices are continuing their autumn plunge in the South Sound and in the nation this week as American oil production continues growing and gasoline demand keeps declining. The result has been pump prices at 11 or more Tacoma-area filling stations of less than $2.80 a gallon.

Four stations are tied for the price leader prize selling a gallon of unleaded regular for $2.75. All four of those stations, two 76s, a Chevron and a Shell, are in the Lakewood area, where a gas price war has broken out in the last week.

On average, according to Tacomagasprices.com, the price of a gallon of regular in the Tacoma area is $3.27 a gallon, a 15-cent decline from just a week ago. That price is 44 cents a gallon less than the average a month ago. Those prices have dropped 76 cents a gallon from the early July peak.

Both Olympia and South King County are likewise seeing bargain prices, though not as low as Pierce County’s. The lowest price in the Olympia area Tuesday was $2.89 a gallon at an APP station at 1306 Fones Road SE. In Federal Way, the low-price leader was Costco at 35100 Enchanted Parkway S. where regular unleaded was $2.93 a gallon.

Energy experts expect fuel prices may decline further as cool weather driving declines and production levels stay high.

“The key will be what happens to crude oil prices. If it continues to go down, retail prices will go down,” Jennifer Cook, spokeswoman for AAA Washington told the Bellingham Herald.

Much of the low price impetus comes from American oil producers who are using new hydraulic fracturing techniques to extract oil from deep formations in Texas and the Dakotas. American oil production is now 8.7 million barrels a day, a million more barrels a day than at this time last year, the highest U.S. production in 25 years.

That new production is forcing crude oil prices lower with benchmark crude prices now flirting with $80 a barrel.

Oil analysts say that lower prices won’t have significant effects on production unless oil drops to $60 a barrel because little of the new production require $80 prices to be profitable.

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