If you thought you got a deal at the pump last weekend, just wait. The coronavirus has crushed the demand for gasoline and now prices continue to plunge, especially in the Great Lakes region. And experts say this “demand collapse” could rival that of the Great Recession.
You may have felt pretty good with the price at the pump over the weekend, ranging from 1.40 to a buck 50 in some cases. But in the coming weeks, experts expect the price to drop even lower. Here’s Patrick DeHaan, head of petroleum analysis at GasBuddy.
“So as long as nothing quickly turns around with this situation, with millions of us staying home, destroying gas demand and that’s causing the gasoline prices to plummet; avg price today in gr 1.83 that could drop another 50-75 cents over the weeks ahead, and certainly the time is ripe for gas drop to under a dollar per gallon.”
DeHaan says the side effects of the coronavirus, like shelter in place orders and bans on non-essential travel have basically crushed the demand for gas in a number of states.
“In fact, GR and Michigan re not only places we could see 99. We could see them throughout the Midwest because gas being produced in region is landlocked in this area. Gas produced here in great lakes is kind of stuck here. So, refineries are forced to offer big discounts to get rid of that inventory.”
And DeHaan adds, as more states shut things down, the impact of the demand collapse could rival that of the Great Recession.
“But never in history have we seen so many lock down is issues ordered, so many shelter-in-place issues ordered—to provoke such a profound drop in gasoline demand, so quickly and I think that’s where we will edge out the great recession, is that demand drop during corona virus will far out-pace any demand drop we saw during the great recession.”
When asked about summer travel, DeHaan says it’s just too early to tell where gas prices will land, depending a lot on what happens with the coronavirus and when.