CINCINNATI – Mounting concerns about the increase in global coronavirus cases and the reinstatement of lockdown policies in some countries has driven crude oil prices down to the lowest closing price since June and, if the trend continues, gas prices nationwide could drop below $2/gal by the end of the year.
Crude oil today is about $35/bbl – or about $20/bbl less than last year at this time.
“The price of oil is, typically, the most significant determining factor when it comes to the price at the pump so, if this trend continues, the national average could drop below $2 by the end of the year,” said Jenifer Moore, spokesperson for AAA.
The downward trend in gas prices continues, with the national average dropping four cents on the week to $2.12. In fact every state except South Dakota (+1 cent) saw gas prices hold steady or decrease over the past week.
“The national gas price average has not been this cheap at the start of November since 2004,” Moore added.
Oil market dynamics
At the close of Friday’s formal trading session, WTI decreased by 38 cents to settle at $35.79. Domestic crude prices decreased in light of market concern about increasing coronavirus infections worldwide, which could lower crude demand.
EIA’s weekly report has also contributed to the decline in prices after it showed that total domestic crude inventories grew by 4.3 million bbl to 492.4 million bbl. If demand concerns continue this week, crude prices will likely decrease again.
For more information, visit www.AAA.com.