Lower gas prices will hang around all winter

Gas pump handle

$4 a gallon gas is just a bad memory.

Why?

As gas got more expensive, people cut back on driving.

Americans drove 5.6% less, or 15 billion fewer miles, in August compared with the same month in 2007. That's the largest single monthly decline on record, according to the U.S. Department of Transportation.

The driving drop-off created less of a need for gas -- and for oil, the key component in gasoline.

Because of that, and a slowing global economy, oil has taken a spectacular tumble from last summer's peak of $140 a barrel to $40 a barrel this winter.

Will prices rise again? Almost certainly, but probably not until spring.

Analysts project gas prices could drop to an average of $2.20 to $2.50 a gallon nationally and $2.70 to $3 in California, by January 2009, according to the Los Angeles Times.

On Oct. 24, the Organization of the Petroleum Exporting Countries voted to cut oil production. But even if that happens, experts say prices will continue to fall.

"I think we definitely have another 15 cents to 20 cents to go," Fred Rozell, director of retail pricing for the Oil Price Information Service in New Jersey, told the Times.