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Gas Price Continue Their Decline. But How Low They Go Will Depend On OPEC Deal.
April 13, 2020
The dive at the gas pump continues last week with Florida gas prices falling another six cents. How low gas prices will go will depend on how the market responds to a historic deal made by OPEC and its oil producing allies over the weekend.
On Sunday, OPEC and its allies agreed to cut oil production by 9.7 million barrels per day — the single largest output cut in history. This effectively ends a price war that broke out between Saudi Arabia and Russia, which caused an overnight 25% reduction in oil prices last month. From there, the downward trend continued as the effects of the coronavirus impacted the global economy and forced Americans to stay off the road.
“The OPEC deal should not cause gas prices to suddenly spike, but it will affect how low they can go,” said Mark Jenkins, spokesman, AAA — The Auto Club Group. “Wholesale gas prices suggest the state average could eventually reach $1.50 or below, but that won’t happen if oil prices gain upward momentum.”
Since February 21, the price of crude plummeted from $53 per barrel to $23/b. Florida gas prices also dropped 56 cents. This deal is an attempt to help eliminate supply surpluses and strengthen the price of crude.
The state average of $1.85 per gallon is six cents less than a week ago, and 95 cents less than last year.
The average price per gallon in Escambia County was $1.75 per gallon. Three Cantonment stations were at $1.55 Sunday night, and Pensacola stations were as low at $1.49.
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Comments
One Response to “Gas Price Continue Their Decline. But How Low They Go Will Depend On OPEC Deal.”
yeah, the geniuses that produce the stuff have so much oil they no longer have storage space for it. once a well is shut down, it costs to get it back going again. i wonder what they are thinking, maybe that all of a sudden demand is gonna go back to normal. wishful thinking i believe. people are staying home, not driving around all day like b4. that nowhere to go and all day to get there crap has stopped. it may not be Captain Trips from The Stand, but it’s bad enough.