In the latest AAA report, market concerns grow that crude demand will decline as coronavirus infections increase across the globe. Crude oil prices saw a significant decline of $5/bbl on the week, down to $62.32/bbl at Friday’s close. The downward crude price trend could spell good news for motorists.
“Crude oil prices saw not only a dramatic drop on the week, but the price per barrel is at the cheapest in three months,” said Jeanette McGee, AAA spokesperson. “If this downward trend continues and less expensive prices are sustained, Americans can expect to see relief at the pump in the near future.”
While today’s national gas price average ($3.16) is just two cents cheaper than last Monday, by the end of this week it could be even less. All eyes are on gasoline demand, which has declined for three straight weeks. The Energy Information Administration’s (EIA) latest reading puts demand at 9.3 million b/d. That is a healthy pandemic demand reading, but still about 6% below the same week in August 2019. The softer demand readings have pushed gasoline stock levels over 228 million bbl.
“Cheaper crude, softening demand and growing stock levels equal the right combination for cheaper prices at the pump, which many Americans would likely welcome after such an expensive summer,” added McGee.
At $3.16, today’s national average is 98 cents more than a year ago and 56 cents more than two years ago.
The nation’s top 10 largest weekly decreases: Ohio (−9 cents), Washington, D.C. (−8 cents), Kentucky (−8 cents), Indiana (−7 cents), Michigan (−6 cents), Illinois (−5 cents), Kansas (−4 cents), Florida (−4 cents), Wisconsin (−4 cents) and Texas (−3 cents).
The nation’s top 10 least expensive markets: Mississippi ($2.78), Texas ($2.81), Louisiana ($2.82), Alabama ($2.82), Tennessee ($2.84), Missouri ($2.84), Arkansas ($2.85), Kentucky ($2.85), Oklahoma ($2.86) and South Carolina ($2.86).
Oil Market Dynamics
At the close of Friday’s formal trading session, WTI decreased by $1.37 to settle at $62.32. Price decreases occurred despite EIA’s latest report showing that total domestic crude stocks decreased by 3.3 million bbl to 435.5 million bbl last week. For this week, crude prices could decrease further if demand concerns persist due to surging coronavirus infection rates across the globe.