Crude oil's plunge expected to drive gas prices to $2.60 a gallon, or less

Crude oil's latest plunge hit the energy sector hard again Friday, but consumers are likely to see a new round of softening gasoline prices well into the holiday season.

Pump prices, already 49 cents lower than year-ago levels to a national average of $2.79 a gallon Friday - are expected to come down at least another 19 cents, to $2.60. But a handful of states, including Missouri,Oklahoma and South Carolina, could soon see sub- $2 gas, says Tom Kloza, senior analyst with the Oil Price Information Service.

The drop - which is expected to save consumers more than $400 million a day - is coming courtesy of the Organization of Petroleum Exporting Countries, the 12-country cartel that was unable to agree on production cuts at a Thursday meeting. That sent crude oil prices tumbling Friday, with benchmark West Texas Intermediate crude oil dropping over 10% to $66.15, lowest since September 2009. Wholesale gasoline contracts for mid-December delivery sank 6.5% to $1.90.4 a gallon.

Oil's slide sank energy sector stocks, especially drillers and energy services stocks. More oil patch carnage could follow, because oil prices, hurt by the stronger dollar, lower demand and rising output by North American producers, have yet to floor.

"The heaviest selling came as the (market) closed, and that is not a good omen for next week's trading,'' Kloza says."It appears likely that much more aggressive cuts will be coming."

The aggregate fallout? U.S. consumers will soon be paying less than $1 billion a day for motor fuel, the lowest daily bill since January 2010.

Homes and businesses that use heating oil will also see a break, with prices expected to fall below $3 a gallon, vs. 2013 winter prices of $4 to $4.25.

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