With the spread of coronavirus forcing many to change their work and travel plans, and a prolonged price war in the global crude oil market, the U.S. average price for gasoline has plummeted since the beginning of the month, with the Idaho average price slowly but steadily following suit.
Today, the national average price for regular gasoline is $2.11, which is 36 cents cheaper than a month ago and 52 cents less than a year ago. In the Gem State, the current average price is $2.45, which is six cents less than a month ago and three cents less than a year ago.
Gasbuddy.com reports that in Rexburg gas prices are between $2.36 and $2.48.
Currently, 21 states have pump prices below the $2/gallon mark.
“More people are working from home, limiting their errands, and providing care for children who are temporarily out of school. That has significantly impacted the demand for fuel, putting some downward pressure on gas prices across the country,” says AAA Idaho spokesman Matthew Conde. “At the same time, refineries in our area are using this opportunity to slow production and prepare for seasonal maintenance. The decline in our local supply has prevented some of our regional gas prices from falling as quickly as in other parts of the country.”
According to the latest report by the Energy Information Administration, gasoline stocks dipped for the 4th straight week in the Rockies region, though only by 200,000 barrels. Total stock levels sit at 8.9 million bbls, 1.6 million more than a year ago. That’s helping gas prices in Idaho and elsewhere to drop, and the trend will likely continue for the near future, or until the pandemic is resolved.
Meanwhile, the West Texas Intermediate benchmark for crude oil dropped as low as $20 per barrel last week, a price not seen since 2002. Saudi Arabia and Russia’s continued dispute over crude production has resulted in an oversaturation of the market, as the Saudis continue to offer cheap crude oil prices in an effort to seize additional market share from the United States and other oil producers.
Today, crude oil is trading near $23/bbl, which is $30 less than a month ago and $36 less than a year ago. Crude oil impacts 50 percent of the price of gasoline, with more immediate pricing effects in the Gulf of Mexico and on the Eastern seaboard. If crude prices remain unusually low, additional downward pressure will force U.S. average gas prices lower in the coming weeks.
AAA will continue to monitor the gas and crude oil markets to keep the public informed.
“With the return of warm weather and a fairly healthy economy up until the coronavirus outbreak, we would predict that there’s going to be a lot of pent-up demand to hit the road and travel when things get back to normal, so oil and gas prices may surge quite dramatically at that time,” Conde said. “Although oil and gas prices are likely to remain low in the near term, health and safety concerns really prevent drivers from being in a position to reap much benefit.”
AAA encourages the public to make wise travel decisions with the aid of an experienced travel professional, including any changes to existing travel plans or future bookings.
AAA Idaho is affiliated with AAA Oregon/Idaho, which provides 820,000 members with travel, insurance, financial and automotive related services. AAA serves more than 60 million motorists in North America.
An audio version of this news release is available on the AAA News Hotline. In Boise, call 342-9391. Outside Boise, call toll free, 1-800-999-9391. Ask for the AAA News Hotline.