Oil and Gas

How low will gas go? Under $3 a gallon coming soon near you

Oil price war coming?
Oil price war coming?

Halloween is weeks away, but motorists in some parts of the country are getting an early treat at the pump. According to GasBuddy.com, 10 percent of the nation's gas stations are now selling gasoline at less than $3 a gallon.

"I think we could get to 60 percent of stations selling gas below $3 a gallon," later this fall, said Tom Kloza, chief oil analyst at GasBuddy. "There's even a chance that people in California and the Pacific Northwest could prices close to $3 a gallon later this fall."

Missouri is the one state where the average price at the pump has now dipped to about $2.99 a gallon. Columbia, Missouri, is the city with the cheapest gas in the nation, at $2.97 per gallon. But drivers in Rocky Hill, South Carolina, are paying just a penny more on average, while in Tulsa, Oklahoma, the average price is now just under $2.99, as they are in more than half a dozen metropolitan areas.

Read More The surprising impact of plunging oil prices

Nationally, prices at the pump have fallen by an average of 15 cents per gallon from last month, to an average of $3.29 per gallon. While that's only about 6 cents less than a year ago, John Kilduff the CEO of Again Capital sees prices at the pump falling even further by the holiday season this year.

"I think we have 10-15 cents a gallon working its way through the system right now, over the course of the next week or so—and that could pick up even further," he said.

Kilduff says rising tension among members of OPEC will make it unlikely the oil cartel will move to cut production levels before its next scheduled meeting Nov. 27. The cartel's oil output is far outpacing demand, at a time when U.S. production continues to rise. That should keep pressure on oil futures prices, and feed through to lower costs at the pump.

Read More If Brent falls under $90, OPEC cuts coming: Strategist

"It's kind of a perfect storm in terms of surging crude oil output and supply, and weakening demand in Europe and China, combining into a one-two punch. I think we go as low as $2.85 a gallon, at least on the national average, before things settle out."

Tom Kloza doesn't expect the national average at the pump will get too much below $3, because in states like California and some in the Northeast like Connecticut, where taxes are high. But in the Northeast, it's not just gasoline that will be cheaper this winter.

A woman pumps gas at the Victory gas station in Pembroke Pines, Florida.
Getty Images

"If you use heating oil … you're looking at paying 50 to 75 cents less per gallon than you did in the last few winters," he said.

The fundamentals make Kloza confident of his prediction, but the bearishness of the market makes him wonder just how low prices will stay.

"There's so much bearishness ... you start wondering whether the futures market is trying to carve out a bottom," he said.