Lazaro Aleman
ECB Publishing, Inc.
Floridians can expect gasoline prices to dip below $2 per gallon in some areas of the state this week, another byproduct of the coronavirus concern, according to information from the American Automotive Association (AAA).
The organization based its latest prediction on crude and gasoline futures prices tail-spinning overnight on Sunday, March 8, hitting lows that hadn't been seen since 2016.
Just two weeks ago, according to AAA, the price of crude traded for more than $53 per barrel. By Sunday night, however, the price had dropped to around $33 per barrel.
“Crude prices have been reeling during the past two weeks, as coronavirus concerns have led to lower global demand for jet fuel and gasoline,” AAA spokesman Mark Jenkins said.
He noted that OPEC and its allies met late last week in hopes of cutting oil production to offset the dipping demand. But not only did they not make a deal, it appears that the parties will also not extend their existing production cut agreement, Jenkins said.
“What this means is even more oil hitting the market at a time when demand is falling,” he said. “By the end of last Friday, crude had lost more than 20 percent in value, declining a total of $12 per barrel in two weeks.”
Then late Sunday night, according to the AAA, fuel markets were dealt another heavy blow when crude oil (WTI) plummeted an additional 20 percent on the expectation that Saudi Arabia planned to boost production and begin a price war with Russia.
As of Sunday night, however, WTI crude was still trading for around $33 a barrel, after briefly hitting $29.50. Gasoline futures also lost significant value on the stock market, dropping more than 20 cents per gallon, according to the AAA.
"At the rate fuel prices are falling on the stock market, Florida drivers could easily begin seeing sub-$2 gasoline this week," Jenkins said. "The only potential upward pressure on pump prices is spring maintenance season. If the state average eventually drops below $2 per gallon, it would be the first time in four years. How long this holds or how low prices go will rely on where stock market prices go from here."
On Monday, March 9, the state average for regular gasoline of $2.276 per gallon, or seven cents per gallon cheaper than the previous week, and the lowest daily average price since February 2019, the AAA reports. The state average reportedly has fallen 11 cents in the past 11 days, with drivers currently paying 19 cents per gallon less than this same time last year.
In Jefferson County, the price of a gallon of regular gasoline was $2.499 on Monday, March 9. It was $2.345 per gallon in Tallahassee at the same time.