The price of gasoline has fallen to 99 cents at a Kentucky gas station after oil prices dropped to an 18-year low amid coronavirus fears.
Patrick De Haan, an analyst for GasBuddy, was tipped off by app users that a gas station in London, Kentucky, was selling gas for 99 cents a gallon and quickly sold out, according to Fox News.
De Haan has predicted that the nationwide price of gas could drop to roughly $1.50 due to a combination of increased supply in Russia and Saudi Arabia and falling demand due to the coronavirus outbreak.
Saudi Arabia recently decided to increase oil production following Russia’s decision to refuse to agree to OPEC’s call for a drop in oil production. Those moves came amid an already oversupplied oil market, which drove down prices.
On top of that, people who drive less and travelers who fly less due to coronavirus fears are creating less oil demand, which means lower oil prices.
“There’s so many cliches I try to avoid — unprecedented, shocking, we haven’t seen this before — but this is really a moment that will live up to the meaning of unprecedented,” De Haan said earlier this month.
Louisiana Republican Rep. Garret Graves has called on President Trump to act to mitigate the oil price crash.
“It is in the national interest to sustain the oil and gas industry to fend off this economic warfare coming from nation-states and a decrease in demand globally because of coronavirus,” Graves told the Washington Examiner. “There needs to be a national response. We can’t just dump this all on the lap of industry.”
“While we can generally pull oil out of the ground cheaper than Russia in many instances, Saudi Arabia can pull it out of the ground at a much lower barrel cost than us, and part of that is because of our royalty rates,” he added. “We should be taking a fresh look to see if short-term reductions are necessary based on the low price of energy.”
