Aug. 12--Hidden among the doom and gloom of the U.S. credit downgrade, and subsequent stock market schizophrenia, there appears to be a bright spot -- gas prices are dropping. Standard & Poor's decision to downgrade the federal government's credit rating late last week sparked a widespread stock market sell-off on Monday and a roller coaster affect as the week progressed. That, in conjunction with weak fuel demand associated with consumer concerns over the economy and the pending conclusion of the summer travel season, is impacting crude oilspeculation and causing retail gas prices to slowly slide southward, analysts said. "As stocks drop, concerns over the economy grow and speculation dips," said Greg Grootendorst, a chief economist with the Hampton Roads Planning District Commission. "With sluggish (economic) growth globally, demand for fuel is not what it was" and prices "come down very slowly." Patrick DeHaan, a senior petroleum analyst with gasbuddy.com, said crude oil is currently trading at about $85 per barrel -- although prices hit $76 per barrel before rebounding -- an approximately $17 decline from two weeks ago. "Oil prices are taking a beating," he said. As demand weakens, consumers could see prices reduced by 10 to 35 cents per gallon, DeHaan said. As of Thursday afternoon, the average cost in Hampton Roads for a gallon of regular gasoline was $3.57 -- an eight cent decline from a week ago, but still about $1 more per gallon than drivers paid one year ago. Also Thursday, the cheapest gas in Hampton Roads could be found in Norfolk where three stations were charging $3.28 per gallon. On the Peninsula, Sam's Club on Jefferson Avenue had the lowest price at $3.38 per gallon, according to gasbuddy.com. Comparatively, the average price Thursday for a gallon of regular gas in Virginia was $3.52 and $3.62 nationally. Those figures were down nine cents and eight cents respectively from a week ago, according to the AAA's Daily Fuel Gauge Report. Retail gas prices could drop to $3 -- $3.25 per gallon in some suburbs and rural areas, a AAA Tidewater statement said, citing Oil Price Information Services. As a rule, a $1 drop in the price of crude oil manifests as a 2.5 cent drop in gas prices, so a $10 decline in the cost of a barrel of crude equals savings of about 25 cents per gallon at the pumps, the statement said. "How low it will go, or if we see gas below $3 a gallon is anyone's guess," said Georjeane Blumling, a AAA Tidewater spokeswoman. "Gas prices are volatile. Natural disasters and other things happening could put a hiccup in that." DeHaan said he did not believe gas would drop below $3 and he expected the trend to be short-lived unless there is a dip in the gross domestic product and increased talk of recession. "As long as the numbers show the economy growing, we will see gas above $3 per gallon," he said. But even a 10 cent drop could make a significant impact if it is sustained because the price of gas typically has the largest impact on discretionary spending, according to Grootendorst. A 10 cent decrease in gas prices, that sticks over the course of a year, equates to $100 million being added to the Hampton Roads economy, he said. "It's highly significant. It's certainly good news," Grootendorst said. "The implication overall, of course, is not necessarily a good thing though. We'd rather see robust growth. We don't want to lose sense of the overall picture."

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