Gas prices keep going low in Fresno, Valley as coronavirus concerns grow
As fears grow over the potential effects of a coronavirus outbreak with at least two confirmed cases in the central San Joaquin Valley, one by-product of the global concern is cheaper gasoline prices at retail fuel pumps.
Allison Mac, a petroleum analyst with GasBuddy.com, said that coronavirus is playing a lead role in a worldwide decline in crude oil prices because of the basic economic principle of supply and demand on a global basis.
“The biggest reason for oil prices going down is the coronavirus,” Mac said Tuesday. “Demand has definitely taken a hit. When a country like China, which is the second-biggest consumer of oil after the U.S., is taken out of commission because its cities are locked down, demand takes a hit.”
Fears about the spread of the virus following an outbreak in the Wuhan province of China had begun to take a toll on crude oil prices even before an oil price war launched earlier this week by Russia and Saudi Arabia. So far in 2020, crude oil prices peaked at more than $63 per barrel in mid-January, but since that time have fallen dramatically. On Monday, prices dipped as low as $30 per barrel before rebounding somewhat Tuesday.
Mac compared the current oil prices to where they were in the summer of 2008, when they peaked at about $145 per barrel and drove retail gasoline prices to more than $5 per gallon in some U.S. markets.
In Fresno on Tuesday, the average price for regular unleaded gasoline was reported at $3.27 per gallon by AAA Gas Prices. That’s down by about 4 cents from a week ago. A month ago, on Feb. 10, the average price was about 14 cents higher per gallon.
GasBuddy.com, which relies on users of its mobile app to report prices at gas stations nationwide in real time, reported similar declines in gas prices over the past week and month in the Fresno market.
“When we look at the Fresno market, we’ve already seen prices coming down,” Mac said. “And it’s only going to continue dropping because of oil prices. … You’re going to see fewer prices with a $3 at the front and more numbers with a $2 at the front.”
For California drivers, the falling prices are out of the ordinary for this time of year. Refineries are in the process of a seasonal changeover in production to a cleaner-burning – and more expensive – summer blend of gasoline. “If the coronavirus didn’t happen, we’d be talking now about why gas prices are going up,” Mac said. “What we’re seeing now with prices is not normal.”
If Russia, Saudi Arabia and other oil-producing countries remain in disarray on production quotas to stabilize crude-oil prices, “I think we’ll see prices go down another 20 to 30 cents a gallon in the next three weeks – if nothing changes,” Mac added.
This story was originally published March 10, 2020 at 2:37 PM.
