TAMPA, Florida — Florida drivers are beginning to find gas prices below $2 a gallon in many markets. According to AAA, 11% percent of Florida filling stations have sub-$2 gasoline. That number is sure to rise in the coming days.
“Low pump prices are likely to get even lower this week,” said Mark Jenkins, spokesman, AAA – The Auto Club Group. “The combination of the coronavirus and the ongoing price war between Saudi Arabia and Russia are contributing to some of the lowest futures prices since the Great Recession. Oil prices plunged early last week after Saudi Arabia pledged to flood the market with oil. As oil prices bottomed at around $33, gasoline futures continued to fall throughout the week. The effects of the coronavirus snowballed. Cancelled flights and large events, school closures, and companies asking employees to work from home lead to less fuel demand.”
Florida gas prices dropped an average of 22 cents in the past 18 days. The state average of $2.17 per gallon is 11 cents less than a week ago, 44 cents less than this time last year, and 39 cents less than the highest price so far this year.
“Although the average price for gasoline in Florida is $2.17, many drivers are paying much less,” Jenkins continued. “More drops are coming this week. Retail prices are still catching up to big drops in wholesale and gasoline futures prices. Unless those prices suddenly bounce back, it’s likely that the state average will soon dip below $2 a gallon.”
Retail Florida Gasoline Prices
- Florida gas prices set a new 2020 low, Sunday
- The state average of $2.17 per gallon is the lowest since January 2019
- Florida gas prices have declined the past 18 consecutive days for a total discount of 22 cents per gallon
- Wholesale gasoline prices are at a level that – if they hold for an extended period of time – could lead to a state average of around $1.90 per gallon
- Most expensive metro markets – West Palm Beach-Boca Raton ($2.34), Gainesville (2.32), Tallahassee ($2.27)
- Least expensive metro markets – Jacksonville ($2.05), The Villages ($2.05), Orlando ($2.08)
- Gasoline futures have lost more than 40% of value in three weeks
- Friday’s closing price was 90 cents per gallon; nearly 50 cents less than the week before, and the lowest daily settlement since December 2008.
Crude Oil Futures
- Crude oil lost more than 40% of its value since late February
- A barrel of WTI crude remains in the low $30s
- Friday’s settlement was $31.73 per barrel. Just three weeks ago, crude traded in the low $50s
Major Shift in Forecasts
The EIA recently slashed its fuel price projections for 2020 and 20201, citing “significant uncertainty amid a highly volatile market”.
According to the Energy Information Administration:
- Will target market share instead of a balanced global oil market.
- Crude oil production from April-December 2020 will increase by nearly 2% through the rest of the year, and nearly 2.5% in 2021.
- US crude oil prices for 2020
- Will average 33% less than 2019, as declining global oil inventories put upward pressure on prices.
- WTI crude will average $38.19 per barrel this year and $50.36 in 20201.
- This is 35.3% less than initial forecasts back in January.
- U.S. crude oil production
- Will begin declining around May, due to lower oil prices.
- EIA models suggest oil prices affect production after about a six-month lag.
- Production could fall from 13.2 million b/d in May to 12.8 million b/d in December 2020; then fall to 12.7 million b/d in 2021.
- The forecast decline in 2021 would mark the first annual U.S. crude oil production decline since 2016.
- US retail gasoline prices
- Will fall to a monthly average of $1.97/gal in April before rising to an average of $2.13/gal from June through August.
- Will average $2.14 in 2020 – 18% less than 2019.
- Jet fuel
- Demand over the past four weeks is nearly 13% less than a year ago, due to flight cancellations.
- This decline rivals demand figures not seen since the 9/11 attacks.
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