Low Demand Keeps Pump Prices Low

April 27, 2020

Gas prices are still declining after a turbulent week in the fuel market. Crude oil prices sank to record lows last week amid growing concerns that producers are running out of space to store excess fuel supplies.

Florida gas prices remain at 4-year lows. Prices at the pump are averaging $1.78 per gallon across the state and $1.66 in Escambia County.

North Escambia are gas prices were as low as $1.47 Sunday night in Cantonment.

“Gas prices face continued downward pressure from extremely low demand, as residents are urged to stay home to stop the spread of coronavirus,” said Mark Jenkins, spokesman, AAA – The Auto Club Group. “The low demand has made it less profitable to pump oil and convert it to gasoline and jet fuel. Refiners are now having to make difficult decisions to either reduce output or close plants in attempt to lower gasoline supplies to match demand.”

The oversupply issues for gasoline are similar to the issues with the global supply of crude. Last week, the price of crude collapsed by more than 300 percent, with prices dipping well into the negative. The record lows were brought on by concerns that the US will soon run out storage for excess supplies. Energy experts believe global crude storage will reach capacity within the next 3-4 weeks, unless output is dramatically reduced.

By Friday, crude oil futures returned to $16 per barrel. The upswing was brought on by a new contract month, another US stimulus package, demand recovery in China

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Written by William Reynolds · Filed Under News