Community News

Oil Plummets on Coronavirus Fears, Gas Price Drop Accelerates

 
by: Gas Buddy
Posted: January 27, 2020

 

HUNTINGTON BEACH...For the second straight week, the national average price of gasoline has fallen, posting a decline of 3.9 cents to $2.50 per gallon today according to GasBuddy data compiled from more than 11 million individual price reports covering nearly 151,150 gas stations across the country. The average price of diesel fell 2.7 cents to $2.97 per gallon. The average price of gasoline is now at its lowest since March 10, 2019.

“Worry has gripped oil markets, sending the commodity plunging in value in recent weeks, with motorists continuing to be the beneficiaries as downdrafts in gas prices accelerate,” said Patrick DeHaan, head of petroleum analysis for GasBuddy. “With oil prices now nearly $6 per barrel lower than a week ago and nearing their lowest level since October, there’s plenty more room for the decline in gas prices to be extended again. While the national average could fall into the $2.30’s before all is said and done, the downward move likely won’t last much more than a few more weeks. For now, my advice to motorists is don’t be in a rush to fill- nearly every station nationwide will be cutting their prices in the days ahead- but shop around if you do need to fill up and patronize the stations with the lowest prices.”

Oil prices have plummeted on fears that the coronavirus will spread and could turn into a major health crisis. In early Monday morning trading, West Texas Intermediate crude oil stood at $52.93 per barrel, $6 lower than just a week ago. Brent crude oil’s sell-off was even larger, with a barrel fetching $59.27, down from $65.45 a week ago. Stock markets were trading considerably lower as traders flee from commodities to safe havens like U.S. bonds, the dollar and gold. A major concern is that a widespread virus could halt economies and greatly reduce travel and thus demand for petroleum.

Data from the Energy Information Administration last week showed a small drop of 400,000 barrels to oil inventories, while gasoline inventories saw a rise of 1.7 million barrels and distillates dropped 1.2 million barrels. Gasoline demand remained notably weak, registering at 8.66 million barrels per day, pushing implied demand down 1.9% so far in 2020. Overall petroleum inventories remain strong, up 27 million barrels from a year ago. In the weeks ahead, gasoline inventories may begin to decline as refiners begin winter maintenance and purging winter gasoline from inventories, but that may be offset by the coronavirus if the situation does not improve and could even limit the typical seasonal rally in petroleum markets.

Nearly every U.S. state saw average gasoline prices give up ground in the last week with the most common gas price across the country falling to $2.39 per gallon, down 10 cents from a week ago, followed by $2.29 per gallon and $2.49 per gallon as second and third most common, respectively, with the higher $2.49 per gallon falling into third place from first place a week ago. The average cost at the priciest 10% of stations is $3.48 per gallon, a penny decrease from a week ago, while the lowest 10% average $2.06 per gallon, down 4 cents from a week ago. The median U.S. price is $2.39 per gallon, down 6 cents in the last week and about 11 cents lower than the national average.


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