Oct 6 Reuters U.S. gasoline prices are heading south and may hit 3 a gallon in many places in coming weeks with crude oil futures down 10 a barrel over economic fears and eroding demand.

The drop in gasoline prices could benefit consumers and cool inflation. But it also may be a sign of economic weakness with U.S. government data showing the four week average of gasoline demand at lowest seasonals in 26 years.

Before this week39;s drop, gasoline prices had posted a 7.4 jump in the third quarter, riding increases in crude oil futures after production cuts from Saudi Arabia, Russia and other OPEC members.

U.S. wholesale gasoline prices are tumbling, with percentage drops per gallon on Wednesday between 6.9 and 10.8.

A flurry of weak economic data took more wind out of the market. Crude futures settled an eyepopping 5 a barrel lower on Wednesday, and fell another 1.66 on Thursday.

The fourweek average of motor gasoline product supplied a proxy for demand averaged 8.3 million barrels a day, down 5 from the same period last year, the U.S. Energy Information Administration said on Wednesday.

Demand data was partially influenced as drivers were deterred by severe rain and flooding on the U.S. East Coast.

Gasoline stocks built by 6.5 million barrels in the week, well above analysts39; expectations.

All told, fuel prices may be closer to consumers39; pain threshold than inflationadjusted prices might suggest, JP Morgan said in a note on Wednesday, indicating that high…