While everything looks bad right now amid the panic over the spread of the coronavirus, there’s at least one bright spot: gas prices.
The price per gallon has been dropping quickly over the past few weeks, but they could go much lower, according to GasBuddy.com.
The average price across the nation, according to the gas site, is $2.19. But Gas Buddy analyst Patrick De Haan on Monday told Fox News that the national average could soon plunge to $1.99, “with $1.49 on the horizon and some stations potentially pricing a gallon of regular as low as 99 cents.”
Five states — Iowa, Arkansas, Kansas, Louisiana and Tennessee — have already dropped below $2.
The prices are falling in part due to a recent increase in production in Saudi Arabia and Russia. Markets worldwide have dropped partly because oil prices plunged as producers squabbled over production and supply.
“The steep drop was triggered after Saudi Arabia announced it would raise production after OPEC’s deal with Russia to supply collapsed on Friday,” Forbes reported last week. Oil-producing countries are arguing how much to cut production to shore up up prices.
“Saudi Arabia also reportedly planned to boost its oil production by well over 10 million barrels per day,” Fox News reported. “West Texas intermediate crude was plunging more than 22 percent, the biggest loss since the launch of Desert Storm in 1991, to the lowest levels since February 2016. Safe-haven gold surged above 1,700 per troy ounce for the first time in seven years. Demand for energy was falling as people cut back on travel around the world. The worry has been that the outbreak globally will slow economies sharply, meaning even less demand.”
Reuters reported that while Americans would enjoy paying less for gas, the drop in oil prices would hurt in the long run.
“It’s probably a net negative for the world economy that oil prices have fallen,” said Simon MacAdam, global economist at Capital Economics in London.
“You will now have pain on oil producers and on investment, and you won’t have an uptick in consumer spending because they aren’t comfortable because of the virus concerns,” MacAdam said.