On Wall Street, there is a panic because tensions between the Saudis and the Russians may result in a glut of oil on the market.
But on main street? There are a lot more smiling people filling up the old F-150 at the pump these days as gasoline prices plummet.
An American Automobile Association survey released Monday showed that the Sunday trough in oil prices was already hitting consumers, with some parts of the county having gasoline that was selling for under $2 per gallon.
“Texas ($2.06) has the cheapest average in the region and the nation. Gas can be found for $2/gallon or less at 24% of gas stations throughout the 11 South and Southeast region states. Oklahoma (51%) and Texas (47%) have the highest percentage of gas stations selling gas for less than $2/gallon,” the AAA report read.
In Florida, where AAA said gas was already selling seven cents less this week than last week, predictions were that even lower prices were coming.
“At the rate fuel prices are falling on the stock market, Florida drivers could easily begin seeing sub-$2 gasoline this week,” AAA spokesman Mark Jenkins said, according to WOFL.
“The only potential upward pressure on pump prices is spring maintenance season. If the state average eventually drops below $2 per gallon, it would be the first time in four years. How long this holds or how low prices go will rely on where stock market prices go from here,” he said.
Commentators said lower prices are the rippled effect of international tensions.
“Everyone, I think, is a little bit shocked at the tactics that have come out of the broken-down talks between OPEC, specifically with Saudi Arabia and Russia,” Sarah McCrary, CEO of fuel prices comparison site GasBuddy, told ABC News.
“Effectively what’s happened is in the wake of softening demand for oil, we had expected that there would be an agreement to lower production, to reduce supply … and we would have a gentle change in the market,” she said. “That did not happen.”
Americans will reap the benefits, according to McCrary.
“We’re going to see much less expensive gas across the nation,” she said. “The largest element in the price per gallon that Americans pay is the cost of the oil that goes into making that gasoline.”
Another analyst said the speed of the price drop was unusual.
“It’s been an unprecedented week, one in which oil majors Russia and Saudi Arabia saw anything but eye-to-eye on lowering oil production, leading crude oil prices to plummet 20 percent in Sunday evening trade, combined with COVID-19 fears escalating, and gas prices have nowhere to go but down and like a rock,” Patrick DeHaan, head of petroleum analysis for GasBuddy, told PennLive.
“Oil has now seen its value cut nearly in half after Iran tensions inflamed prices months ago and it doesn’t immediately look like it will get any better. For motorists, I urge them to be in absolutely no hurry to fill up as gas prices will drop in nearly every nook and cranny of the country, from the smallest cities to the largest metros, at a time of year that prices are usually rising, we’ll see anything but that. The national average came into March like a lamb and will likely be leaving as a lion, with prices roaring lower,” he said.
Some said this is just the beginning.
“We are likely heading into an oil price war,” DNB Markets senior oil analyst Helge André Martinsen wrote Monday in a research note, according to USA Today.