The Chinese COVID-19 coronavirus has the world on edge. In particular, oil workers in Texas as they watch the price of crude oil continue to drop.
This is good news for many at the pump, but terrible news for those who depend on oil production, especially shale oil, for their livelihood.
Yesterday several stations in Kentucky dropped prices to 99 cents. Others in Washington state did the same.
It’s only a matter of time before those prices are seen here in Texas. Especially if drivers continue staying home.
Motorists in the Texas and elsewhere are paying less for fuel thanks to fallout from the new coronavirus, which is wreaking economic havoc on several fronts, not the least of which is a massive decline in demand for crude oil.
“The biggest reason is economics 101, supply and demand,” said Allison Mack, a petroleum analyst for GasBuddy.com. “The demand for oil worldwide has dropped day after day as fewer countries need oil.”
In China, the world’s second largest oil consumer behind the United States and where the coronavirus originated, cities are on lockdown, no one is driving or flying and oil demand has cratered, she said. At the same time, the volume of oil production remained the same, creating a glut and driving prices downward, Mack said.
“The biggest determining factor of gasoline prices, the street-level prices we see every day, is oil prices,” she said. “When oil prices go down, gas prices are sure to follow.”