Normally, pump prices are flat or even up a bit in August as Americans finish up the summer holidays with a road trip. But AAA anticipates a drop of 15 cents or more in coming weeks, on top of what has been a sharp drop from this year’s peak.

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WASHINGTON — Think of it as Christmas in August. Gasoline prices are expected to drop sharply this month and might be approaching $2 a gallon in much of the country by the time winter’s chill arrives.

Normally, pump prices are flat or even up a bit in August as Americans finish up the summer holidays with a road trip before sending the kids back to school. This year, however, the AAA Motor Club anticipates a drop of 15 cents or more in coming weeks, on top of what already has been a sharp drop from this year’s peak.

“In many ways it’s a very simple prediction, based purely on the (price) decline in crude oil,” said Michael Green, an AAA spokesman.

Conflict in the Middle East, a disruption to U.S. drilling or a refinery outage could always push up oil prices, thus reducing the chances that gasoline will fall as predicted.

“On the other hand, if oil prices continue to fall and operations continue to run smoothly, you could see even larger drops in (the gasoline) price,” Green said.

How large?

“Many parts of the country could see gas prices near or below $2 a gallon by Christmas,” he said. “The states that are most likely are in the southwest and central United States, places where gas is already cheap.”

South Carolina and Alabama led the nation Tuesday with the cheapest average price for a gallon of regular unleaded gasoline, at $2.26, followed closely by Mississippi and Ohio, both at $2.30.

Motorists in California and Alaska paid the highest prices, respectively, at $3.71 and $3.48 a gallon.

Washington state wasn’t too far behind, at $3.17. The average price for a gallon of regular unleaded gas in the Seattle-Bellevue-Everett area was a little higher at $3.21, but that was down significantly from $3.97 a year ago.

The national average Tuesday was $2.64 a gallon, down sharply from $3.50 a gallon a year ago.

Gasoline prices are falling even as Americans are driving at what appear to be record levels. The Federal Highway Administration’s most recent update on vehicle miles traveled shows that through May motorists in the United States had logged 1.26 trillion vehicle miles of travel — a record for the first five months of any year.

The agency predicts Americans for the year will travel 3.08 trillion vehicle miles. That would be a record, slightly edging out the vehicle miles logged in 2006.

There’s another reason to expect lower prices. U.S. oil and gasoline supplies keep growing even as demand across the globe wavers.

China’s unexpected economic slowdown has lowered demand for oil, as has the prolonged economic weakness across Europe and even in big emerging markets such as Brazil. It all adds up to weak global demand, even as U.S. motorists and boaters drink up more fuel.

Crude oil traded between $99 and $102 a barrel in late July 2014. Late last month this price wavered between $48 and $49 a barrel.

Economic forecaster IHS Global Insight projects that lower gasoline prices will be akin to a giant tax rebate that puts about $700 in the pockets of the average U.S. household this year. These savings have been partially offset by rising food prices this year, as a poultry disease and California’s drought pushed up food prices and thus the inflation rate by 0.3 percent in June and will continue weighing on the pocketbooks on poorer Americans.

But if gasoline prices keep dropping, expect consumers to spend more in restaurants and shops, said Chris Christopher, director of consumer economics at IHS Global Insight.

“Gasoline prices make the overall consumer feel better,” he explained. “It has the tendency to motivate people to spend more, especially in going out to eat.”

And that’s good for the U.S. economy, which continues to outperform the rest of the world.

“What we’re going to see happen in August because of the lower pump prices … you’ll see a strong boost in confidence,” said Christopher, predicting this will be most noticeable for retailers in stronger back-to-school sales.

Auto crashes rise, Allstate tumbles

CHICAGO — Allstate customers are crashing their cars harder and more often — and the insurance giant is paying the price.

The insurer late Monday blamed an “increased frequency and severity of auto accidents” for lower-than-expected earnings in the second quarter of 2015.

Earnings per share fell 38 percent to 63 cents from $1.01 a year ago.

And that sent the firm’s stock price tumbling 10 percent Tuesday.

Allstate, based in suburban Chicago, said the increase in auto accidents was “broad-based by state, risk class, rating plans and the maturity of the business.” In other words, an across-the-board increase in wrecks.

While Allstate didn’t specify the cause, U.S. Department of Transportation data show the total number of miles Americans drive is up 3 percent over the last 18 months. Low gas prices and soaring auto sales likely contributed to the problem.

Customers can expect to see that increased risk reflected in their insurance bills. Allstate raised its rates by 1.5 percent in 34 states in the second quarter and said it expects further raises to follow. Including its Esurance business, rates went up 4.8 percent over the last year.

Kim Janssen, Chicago Tribune