Coronavirus fuels historic drop in gasoline demand
The amount of gasoline American drivers are consuming dropped to levels not seen in more than 25 years, government data shows.
Driving the news: When most of us are staying home and not driving, this is one of the most predictable—but nonetheless still staggering—upshots of the unfolding coronavirus crisis.
The big picture: As the pandemic threatens lives around the world, it’s shutting down a global economy driven by oil consumption. This, along with a related price war between Saudi Arabia and Russia, is sending oil prices—and therefore gasoline prices—into a tailspin.
The intrigue: President Trump is meeting Friday afternoon with oil-company executives to discuss ways to help the imploding sector.
By the numbers:
- Gasoline consumption dropped nearly 30% in the week ending March 27, compared to the week prior.
- The current average price for a gallon of gasoline is $1.95, compared to $2.44 a month ago, according to AAA data.
- Expect both consumption and prices to keep dropping for weeks.
What we’re watching: How low prices could go—and how much they will rise in the future.
- AAA spokeswoman Jeanette Casselano says it could breach the low mark following the 2008 economic crash, which was $1.68 in January 2009.
- Patrick De Haan, head of petroleum analysis at GasBuddy, says the average could drop to below $1.50 a gallon. If it goes much lower than that, it hit the lowest level since 2004.
The bottom line: Consider it a cruel coronavirus irony that most people can’t—or at least shouldn’t—take full advantage of these rock-bottom prices. “But the good news is that even once this is over, I expect far more affordable prices this summer due to a hangover in oil supply,” De Haan emails.