Gas Prices in Some Places Headed for $2

Gas down to $2.05? Experts say drivers in Cincinnati could see prices drop that low soon - though they may not sit there for long.

Jody Suttle, a 22-year-old landscape contractor from Clifton, Ohio, said she limited her driving mostly to commuting to her job in Northern Kentucky this summer when prices were higher; she walked most everywhere else. She also cut back on visiting friends north of Cincinnati.

"The price has been outrageous - I don't make enough to pay for it," she said Wednesday as she filled her Mercury Sable station wagon in Bellevue

Prices are falling now because looming natural and geopolitical threats that pumped up prices this summer didn't materialize, economists say.

The average price of a gallon of regular unleaded on Wednesday in Southwest Ohio was $2.26 - down 81 cents from a high of $3.07 in late July. In Northern Kentucky, gas cost $2.55, down 61 cents from its $3.16 peak just a month ago. And prices on Wednesday had dropped below $2.10 at a handful of gas stations in the region, according to Cheapgasprices.com.

Matthew Roberts, an agriculture economist with Ohio State University, predicted gasoline prices would dip another 10 to 15 cents in the coming weeks before gradually bouncing back up in the fall and winter as the demand for heating oil perks up crude prices.

"I'd be surprised if it got down to $2 a gallon - it will stop short of that," he said, predicting it would drop to about $2.05 in Ohio, where gas prices have been lower than the U.S. average in recent weeks.

The federal Energy Information Administration on Wednesday listed four potential threats to the oil supply that failed to materialize this summer:

The U.N. moving to impose sanctions against Iran for its enrichment of nuclear material.

Hurricanes disrupting oil rigs in, and refineries along, the Gulf of Mexico.

Nigeria experiencing political unrest.

A long closure of a BP pipeline from its Prudhoe Bay field in Alaska, a major oil source for western U.S. states. The pipeline will reopen by the end of October.

Meanwhile, one thing bolstered supplies. Crude production in Iraq hit a two-year high, despite ongoing violence there.

"For crude oil markets, the global situation is about as rosy as has been the case in the last several months," the agency wrote.

Because the four threats didn't happen, the seasonal post-Labor Day drop in gas prices came early - in the last half of August.

Roberts added the price decline was accelerated by cooler, rainy weather throughout the country that discouraged weekend getaways and dampened demand.

Lower demand in turn boosted gasoline inventories, currently running at 207 million barrels nationally, or 7.7 percent ahead of last year. When supply outstrips demand, prices fall - as they are now.

Ken Troske, a professor of economics at the University of Kentucky, noted that a year after Hurricane Katrina pushed gas prices to highs not seen in decades, sustained pain for consumers at the pump this summer has probably altered the way people shop and live.

He noted slumping SUV sales as an example.

"People are adjusting their behavior," he said. "In e

Severin Borenstein, director of University of California Energy Institute, expects gas prices to rebound before the spring to above $2.50.

"Enjoy it while it lasts," he said.