Crude oil prices hit 4-year low amid OPEC disagreement and coronavirus concerns
While the dropping value of stocks may be bad for the market, the consumer is raking in the rewards with low prices at the pump.
Oil prices are plunging as a dispute among producers could lead a global economy weakened by COVID-19 to be awash in an oversupply of crude.
The national gas price average is cheaper on the week (-5 cents), month (-5 cents) and year (-9 cents) giving the vast majority of motorists savings at the pump. At $2.38, the national gas price average has not been this cheap since last February.
"For the third week, U.S. gasoline stocks decreased while demand increased. Generally, growing demand amid declining stocks causes increases at the pump, but crude oil prices have dipped to four-year lows, signaling spring could be cheaper at the pump," said Molly Hart, spokesperson for AAA.
When the global markets opened on Sunday evening, West Texas Intermediate (WTI) crude oil prices dipped below $30/bbl for the first time since 2016. The market plunge is in response to a lack of agreement between Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC countries to cut production. The trend of pump prices facing downward pressure is likely to continue through the end of the winter driving season if crude remains cheap, especially amid concerns about the coronavirus.
With a 1 million bbl build, stock levels bump up to 60 million bbl for the region. This increase helped to push gas prices cheaper on the week. Given the lower price of crude oil, prices are likely to push cheaper in the week ahead.
For Rockford, the current average is $2.36 which is down one cent from Sunday and ten cents from last week. It's nine cents lower than this time a month ago as well. Prices are falling amid worries that producers won't cut supplies enough to match falling demand. COVID-19 has hit travel and threatens to slow economies around the world.