99 cents for gas? It could happen soon during the coronavirus pandemic, analyst says.
Gas prices continue to drop amid the coronavirus pandemic, and one analyst thinks they could fall below $1 per gallon.
That hasn’t happened nationwide since 1999, when U.S. crude oil cost less than $15 a barrel, according to the Wall Street Journal.
Oklahoma, Texas, Mississippi, South Carolina, Ohio, Indiana, Missouri and Kentucky already are seeing statewide averages of under $2 per gallon for gas, according to AAA. Nationwide on Monday, the average was at $2.25, with prices decreasing nearly 20 cents this month, AAA said.
“AAA expects gas prices to continue trending cheaper, with the high likelihood of the national average hitting $2 per gallon before the end of March,” said Jeanette Casselano, AAA spokesperson.
Gas prices have only continued to decrease this week. GasBuddy.com reported Wednesday the national average is at $2.17 and expected to reach $2.15 by the end of the day.
But what about the low gas prices — like, real low?
Patrick DeHaan, an analyst with GasBuddy.com, says gas is expected to drop way below $2.
“We could drop to $1.49/gal with rising likelihood of even lower,” he said on Twitter. “Everyone, even California, is likely based on current markets to hit $1.99 or less with a handful of stations in the country at 99 cents. Don’t rush to fill!”
You read that right —99 cents. Some states may see a number that low in the coming weeks.
He said Tuesday eight states already have locations with prices at lower than $1.49 per gallon. By Wednesday, that number was up to 16.
COVID-19 is playing a large role in the substantial decreases in gas prices, according to Gas Buddy.
“The coronavirus has caused countries to be in lockdown, limiting driving, flying and overall movement in order to contain the spread. This means very little need for oil,” Gas Buddy wrote Tuesday.
Oil demand could drop by 10 million barrels per day, or 10 percent of current demand, worldwide this quarter, Bloomberg reported.
“We haven’t seen a demand event like this in history,” Saad Rahim, chief economist at oil trade group Trafigura Group told Bloomberg. “Every day is going to be worse for demand for some time.”
Crude oil prices nosedived by 24 percent to $20 per barrel Tuesday, CNN reported. It’s the lowest it has been since 2002, she said.
Don’t celebrate over cheap gas just yet. AAA said last week that “sustained cheap crude prices” could lead to a recession.
This story was originally published March 18, 2020 at 4:48 PM with the headline "99 cents for gas? It could happen soon during the coronavirus pandemic, analyst says.."