The national average price of regular gas fell below $2 a gallon Friday for the first time in more than four years and analysts expect that the drop in fuel prices will continue as Americans stay home and Russia and Saudi Arabia flood the market with oil in a price war.
GasBuddy, the travel and navigation app that is used by millions of drivers to save money on gas, reports that the U.S. national average for gasoline fell to $1.99 per gallon, the first time since March 23, 2016. In the past week, gas has dropped below $1 a gallon at stations in Tennessee, Kentucky, Oklahoma, Wisconsin and Missouri and was still selling Friday as low as $1.07 per gallon at a pair of stations in Paris, Tennessee.
In Hamilton County, gas is cheapest Friday at the Sam’s Club of Lee Highway, where regular gas is priced at $1.36 a gallon.
Patrick DeHaan, head of petroleum analysis for GasBuddy, projected that the national average price for a gallon of regular gas could even dip to $1.49 by mid-April, the lowest since 2004, with potentially hundreds of stations pushing their price to 99 cents per gallon for the first time since the early 2000’s. Adjusted for inflation and improved mileage, most motorists are now paying some of the lowest prices ever to refuel their vehicles.
“We’re experiencing one of the biggest historical collapses in gas prices, including the Great Recession of 2008,” he said . “World demand for oil has plummeted virtually overnight while domestic demand for gasoline continues to fall off a cliff with more states implementing shelter-in-place orders. Prices will continue to fall in the days ahead with currently no end in sight.”
The coronavirus has the lowered the demand for oil and lockdowns reduce driving and keep Americans home. The price drops have been so swift and severe that it could take gas stations weeks to fully pass along the lower prices, DeHaan said.
“Motorists need not be in any hurry to fill up, and those who do should be shopping around as prices will continue to race lower,” DeHaan said.
Global oil prices fell again Friday, marking the fifth consecutive week of losses in crude oil prices.
A Saudi Arabia oil ministry official told Reuters Friday that there are no current discussions with Russia to balance global crude markets following the collapse of a three-year deal to limit production earlier this month.
“It does seem that the only thing that will bring OPEC back to discuss stabilizing the market will be lower prices. Therefore we are likely to see more pain in the near term,” said Warren Patterson,ING’s head of commodity strategy. “In the absence of an emergency meeting, the market will likely have to wait until the scheduled OPEC meeting in June for some sort of action.”
Brent crude futures contracts for May delivery, the global benchmark, were last seen $1.79 lower from their Thursday close in New York and trading at $24.55 per barrel, while WTI contracts for the same month were marked $1.22 lower at $21.38 per barrel.