As the coronavirus continues to spread in America and around the world, international financial markets — particularly the oil industry — are being hit hard.
If current trends continue, the American national average for a gallon of gasoline could drop another 25-35 cents, according to Patrick DeHaan of GasBuddy, a blog and travel app that seeks to helps users save money at the pump.
The savings expected for drivers is the result of different market factors rooted in the coronavirus outbreak, according to DeHaan.
“First of all, this is kind of coronavirus-induced,” DeHaan said. “Lower oil demand has OPEC and oil producers mulling over how to stem the decline in oil demand and falling prices. “Last weekend at OPEC’s meeting in Vienna, they were discussing what to do… They were unable to come to an agreement… The second and third largest oil producers in the world — Saudi Arabia and Russia — disagreed on restraining production.”
The disagreement lead to Saudi Arabia cutting oil prices on its own, resulting in both countries indicating they would increase oil production.
“It’s kind of an all-out price war. It could get very ugly,” DeHaan said.
How ugly could the “price war” become?
DeHaan expects that gas prices “have a long way to fall before they catch up to what we’re seeing in the market,” perhaps resulting in a national average that dips below $2 per gallon.
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