Pump prices continue to decline as the global economy faces significant downward pressure from COVID-19 fears and the ongoing crude price war. Since Monday, the national average for a gallon of regular gasoline has dropped by six cents to $2.32. New data from the Energy Information Administration shows that total domestic stocks decreased last week by 5 million bbl to 247 million bbl, while demand increased — from 9.19 million b/d to 9.45 million b/d. Shrinking gas stocks amid rising demand would typically put upward pressure on gasoline prices; however, cheap crude prices have helped to push gas prices lower than expected. If crude prices remain low, American motorists will likely see continued relief at the pump during the run-up to spring as the world grapples with how to contain the global public health threat and financial risks associated with COVID-19.
Largest Weekly Decreases
- Since last Thursday, these 10 states have seen the largest declines in their averages: Michigan (-16 cents), Indiana (-14 cents), Illinois (-14 cents), Kentucky (-13 cents), Ohio (-11 cents), Oklahoma (-11 cents), Wisconsin (-10 cents), Iowa (-10 cents), South Carolina (-10 cents) and Kansas (-9 cents).
Domestic crude oil prices have continued their descent as the international threat from COVID-19 has grown. In addition to virus fears, an oil price war between Russia and Saudi Arabia has added to market concerns as both countries announced efforts this week to increase crude exports while global crude demand is forecasted to decline due to COVID-19. Dumping cheap crude oil into the frenzied global market could help both countries gain individual market share, but the reduced price for oil has forced domestic energy companies to slash budgets and investments. Although these events have pushed oil prices lower, to the benefit of consumers, continued oil market turmoil and sustained cheap crude prices could ignite further market erosion that leads to a recession. Until the price war ends and fears about the impact of COVID-19 on global crude demand subside, domestic crude prices are likely to remain low. At the close of Thursday’s formal trading session on the NYMEX, WTI decreased by $1.48 to settle at $31.50.