The national average for gas prices in the United States has hovered around $2 as the global demand to travel plummets, and the already oversupplied market continues to flood with oil due to the lack of substantive actions by OPEC and Russia. With the price-per-barrel at unexpected lows, some areas of the country are reporting gas prices not seen since the 1990s and 1980s.
According to AAA, at the time of writing, the national average for gas was $2.089. A quick scan through the map reveals national averages hovering around $2 and the high $1 range, with the lowest average being in Oklahoma at $1.6 and the highest being in California at $3.1.
Gas prices in areas of Michigan are as low as $1.23, while in Ohio, one of the lowest reported prices was $1.08. Oklahoma City, however, currently has the lowest reported gas prices, with some gas stations as selling gas at as cheap as 90 cents per gallon, prices that have not been seen since the 1980s.
The primary cause of gas prices being driven to record lows is the global supply glut; while the Coronavirus pandemic has contributed to the over saturation of the market due to a worldwide decline in travel demand, the supply glut can be traced back to the Sino-American Trade War, which caused oil supplies to accumulate due to the lessened export volume to China. With new cases in the United States and many other countries abroad growing at an exponential rate, demand will likely continue to remain low. Also, the lack of comprehensive action by OPEC+ and the ongoing price war between Russia and Saudi Arabia will likely only exacerbate an oversaturated market and dismally low prices.
What this means for consumers, of course, is astronomically low prices. While some areas already have prices as low as 90 cents, such prices could become far more common throughout the country, according to Patrick DeHaan of GasBuddy.com.
"Gas prices have spent virtually all of March marching lower, with the drop continuing as the coronavirus destroys oil demand globally, leading to the lowest oil prices we've seen in 18 years," says DeHaan. "I don't think I've ever seen such a collapse in prices, even including the Great Recession... Gas stations are passing along the drop several weeks behind, and there's plenty more room for prices to drop, putting 99 cents per gallon prices as a strong possibility for perhaps many more stations than we previously anticipated."
As of last week, the price-per-barrel for oil dropped to $20. West Texas Intermediate (NYSE: USO) was down to $22.22, while Brent Crude (NYSE: BNO) was down to $25.54.