With tens of millions of people quarantined in China, fuel consumption has dropped dramatically there, sending demand falling on world markets. Rose White, at AAA Iowa, says crude oil prices have dropped $9 a barrel in the past two weeks.
“With that, we’ve seen prices tumble across the nation and in Iowa,” White says. “In fact, just over the weekend, price dropped another five-cents a gallon with unleaded averaging $2.27 across the state.”
China is one of the world’s top petroleum users, so with much of that nation grinding to a halt, global demand for gas has dropped significantly.
“U.S. stock levels are high right now, up about 1.4-million barrels above what we had seen just a year ago,” White says. “Typically at this time of year, we do see prices fluctuate a bit as refineries shut down operations for those mandatory inspections.”
White says it’s entirely possible we’ll see prices continue to trend lower in Iowa.
“I think it’s going to last a long time because I don’t know if we’ve seen the full impact yet of the coronavirus,” White says. “Certainly, OPEC is very concerned about the situation to the point that they are debating whether or not they should curb production an additional one-million barrels per day.”
Crude oil futures this morning were trading at just under $46 a barrel. Iowa’s current average of $2.27 a gallon is 16-cents below the national average. Iowa’s cheapest gas is in the Quad Cities at $2.21 a gallon while Iowa City has the most expensive gas at $2.38.
(Reporting by Pat Powers, KQWC, Webster City)