Due to the fact that consumers are less travel due to pandemic coronavirus, the average price of gasoline on Friday, April 17, has reached $1.82 per gallon, which is 6 cents less than a week ago. In April of 2019 drivers was paying $2,83 per gallon (3.78 l). About it writes USA Today.
According to the GasBuddy app for saving on fuel, the average cost of gasoline in the country is to be $1.78, and in 13 States the cost is below $1 per gallon: Arkansas, Colorado, Iowa, Kansas, Kentucky, Michigan, Mississippi, Missouri, new York, Ohio, Oklahoma , Virginia and Wisconsin.
Analysts say that the price of crude oil hit lows not seen since 2002, as demand fell to a level that was not more than half a century, and that imbalance means that fuel prices should continue to decline.
According to the GasBuddy report of 15 April about the trends of consumer purchases of fuel, in March 2020, the volume of procurement gallon fell by 20% compared to March 2019. And in April, gasoline demand fell by 50-70% compared to the end of February and beginning of March.
GasBuddy also found that in six States — Wisconsin, Kentucky, Michigan, Oklahoma, Minnesota and Illinois have the lowest rate of the cost of gasoline over the last ten years.
Patrick Dean, head of Department of the analysis of oil GasBuddy, said in his blog that five of the six States and fuel prices were not so low for the last 15 years. For Illinois, the average cost of $1,77 had not been so low since November 2008.
Dean said that the average prices in the country may “ultimately fall to the low of 2008/2009”. According to GasBuddy, at the end of December 2008 the average price of gasoline in the country amounted to $1,59.
“I fully expect that approximately half of the States eventually prices will fall to lows for the decade, and perhaps most prices will eventually fall to lows not seen since the beginning of 2000-ies,” — said Dejan.
However, given that some parts of the country are planning soon to resume work, whether consumers take advantage of lower fuel prices?
De Haan believes that there is great potential that gasoline prices will be lower this summer than previously forecast.
In addition, the price of American WTI crude oil on Monday fell below $3 a barrel, last time the prices were in 1983, writes the BBC.
Futures of the American crude oil WTI on Monday, April 20, has decreased by more than 80%.
The price of Brent crude oil on Monday also declined to nearly $27 per barrel, but much slower. She has lost about 5% of the cost.
The Russian mark Urals cost Friday $23 per barrel.
Analysts explain falling of the prices of the two factors. First, production cuts, which after a few weeks of a trade war have agreed Moscow and Riyadh.
In early April, OPEC+ agreed to reduce oil production 9 700 000 barrels per day. Agreement first joined US. Saudi Arabia and Russia have agreed to cut production by 2 500 000 barrels per day in may and June.
Due to reductions, these countries hoped to achieve a sharp increase in oil prices, but some analysts believes that production must be further restricted.
“The market saw that the OPEC agreement+ in its current form will not be enough to balance the oil markets,” says chief analyst of the brokerage company Axicorp Stephen Innes.
But the main problem — the lack of space in U.S. reservoirs. Since the beginning of March stocks of oil at Cushing, Oklahoma, one of the main hubs for trade with crude oil in the U.S. increased by almost 50%, according to analysts at ANZ Bank.
“We see selling at dumping prices, because no one, no one wants to store in Cushing continued to be filled every minute,” says Innes.
Bloomberg reported that Saudi Arabia plans to sell the United States in April, approximately 600 000 barrels of oil per day, the highest volume of sales for the year.
In the first seven days of April in the United States from Saudi Arabia went seven tankers with a capacity of two million barrels each.