Gas prices slip in Chicago area, may even go lower

Gasoline prices, which have fallen nearly a dime in Chicago in the past week, are expected to go lower in the coming weeks, oil analysts say.

The average price of regular unleaded gasoline in Chicago was $3.87 a gallon Tuesday, down from $3.96 a week earlier, according to AAA, the Oil Price Information Service and Wright Express.

The decline is linked to the switch from more expensive summer gasoline blends to winter formulations and weaker demand for gasoline and oil, said Chicago-based PFGBEST oil industry analyst Phil Flynn.

Prices in Chicago could fall to an average of $3.50 to $3.55 a gallon by the end of the year and nationally could drop to $3.25 a gallon, he said. Nationally, the average price of unleaded regular was $3.58 a gallon Tuesday, down from $3.64 a week earlier.

Oil Price Information Service Chief Oil Analyst Tom Kloza says prices could drop to $3.60 to $3.75 a gallon by the end of the fall in Chicago and drop to $3.30 to $3.50 a gallon nationally. But he expects prices will likely rise this winter and in the spring of 2012.

Continuing concerns in the Middle East and North Africa, coupled with the potential for tighter oil supplies due to global economic growth outside the U.S., could mean “we’ll be dealing with $4 a gallon gasoline in many markets in the early spring of 2012,” Kloza said.

“Gasoline prices almost always move into an ebb tide in the last 100 days of the year,” Kloza said. “Gasoline demand will probably be unexceptional through the remainder of 2011…We’ll probably see gas consumption that is 1.5 to 3 percent below the same period last year.

“When winter beckons, I suspect we’ll see strong updrafts for crude oil, and for gasoline. Many of those updrafts will be sourced to investment bankers warning their well-heeled clients about the potential for a second Arab spring.”

This spring unrest in the Middle East and North Africa began sending oil prices higher.

Among the cheapest per-gallon prices for gasoline in the Chicago area posted Tuesday on GasBuddy.com were:

*$3.51 at Food4Less, 1000 E. Sibley Blvd. and Greenwood Road in Dolton.

*$3.65 at Citgo, 2151 W. Army Trail Road near Swift Road in Addison.

*$3.65 at BP, 151 W. North Ave. and Harvard Ave. in Villa Park .

*$3.65 at Mobil, 337 W. Irving Park Road and Addison Road in Wood Dale.