Gasoline prices are as low as very low in the coronavirus news

Cars.com illustration by Paul Dolan

The market is in a downturn as more and more states impose restrictions on travel and business operations to slow the spread of COVID-19 Dramatic increase In unemployment claims. Some of the measures that give consumers a glimmer of hope may come: Crude oil prices plummetAs of March 24, the average price of a gallon of regular unleaded gasoline nationwide was only $ 2.11, According to AAA. with a month ago, it is down 37 cents per gallon and 52 cents lower than the same period last year. As of March 24, in some counties in Oklahoma and Texas, the average price of gasoline was less than $ 1.50 per gallon. AAA pinned it to a county seat in Kentucky $ 1.25.

Why is it so low? Get rid of that Econ 101 textbook: It's basic supply and demand.

Related: Coronavirus and car buying: what you should know

In order to keep growing populations around the world from having to stay home to stop the spread of COVID-19, the need for transportation and the oil that fuels it has declined. However, due to the weeks-long price war between Saudi Arabia and Russia, Plans are disrupted as reported Reduce production, oil supply Did not follow the steps exactly.

"Saudi Arabia looks like it is increasing production," said Matthew French, an oil analyst with the Energy Information Administration. "There is a lot of oil supply on the market. Then obviously on the demand side, [considering] the COVID-19 outbreak In all cases, demand has dropped significantly. "

How much depression? Consider: As of today [March 25], more than half of Americans have been ordered to stay home, Estimates based on CNNAnd the entire country- United Kingdom to India -Locking in progress. So no surprise Bloomberg News Global oil demand could dry up by as much as 20% this year.

At the same time, oil have plummeted to Far below $ 30 per barrel. This is down from the $ 60 range for most of 2019. AAA spokeswoman Jeanette Casselano said oil prices have not been so low-for nearly 20 years, U.S. benchmark West Texas Intermediate crude reached 23 per barrel on March 23. Around USD.

Under normal circumstances, when the price of crude oil is $ 60 a barrel, seasonal factors have a greater impact on gasoline prices. But she said that at present, oil prices [about 60% of what you see, lower than oil prices] are more responsible than any other factor.

The price of a gallon of regular gasoline has never been so cheap since April 2016 EIA data. Economy is ready DisastrousAnd consumers need all the help they can get. However, due to the extensive travel restrictions associated with coronaviruses, this savings will not help many households' balance sheets.

"Everyone is at home-no one can benefit from cheap gas," Caserano said. "So when we stay at home, it demand is decreasing. It supply will continue to rise, And gasoline prices will continue to get cheaper. "

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