Oil analysts worry global crude storage will reach capacity in 3-4 weeks
Gas prices are still declining after a turbulent week in the fuel market. Crude oil prices sank to record lows last week amid growing concerns that producers are running out of space to store excess fuel supplies.
Florida gas prices remain at 4-year lows. Prices at the pump are averaging $1.78 per gallon, according to AAA’s gas price website. The state average declined 3.5 cents last week and is nearly a $1 per gallon cheaper than a year ago. Florida gas prices have declined 64 cents since February 20.
"Gas prices face continued downward pressure from extremely low demand, as residents are urged to stay home to stop the spread of coronavirus," said Mark Jenkins, spokesman, AAA - The Auto Club Group. "The low demand has made it less profitable to pump oil and convert it to gasoline and jet fuel. Refiners are now having to make difficult decisions to either reduce output or close plants in attempt to lower gasoline supplies to match demand."
State officials say gasoline demand is down as much as 70 percent in some of the larger Florida metro areas. Refineries are making adjustments. During the past two months, U.S. refinery capacity has reduced from nearly 90 percent down to 68 percent. Gasoline production out of the Gulf Coast is nearly 30 percent lower than this time last year.
The oversupply issues for gasoline are similar to the issues with the global supply of crude. Last week, the price of crude collapsed by more than 300 percent, with prices dipping well into the negative. The record lows were brought on by concerns that the US will soon run out storage for excess supplies. Energy experts believe global crude storage will reach capacity within the next 3-4 weeks, unless output is dramatically reduced.
By Friday, crude oil futures returned to $16 per barrel. The upswing was brought on by a new contract month, another US stimulus package, demand recovery in China. Renewed tensions between the United States and Iran, also led to upward movement in crude oil prices. Last week, President Trump ordered the US Navy to shoot any Iranian ships that harass it in the Persian Gulf. As of this writing, crude oil traded slightly below $16 per barrel in overnight trading. Energy experts believe rebalancing has begun, but it could take 4-8 weeks before we know we’ve hit the bottom in pricing.
- Most expensive metro markets – West Palm Beach-Boca Raton ($1.95), Gainesville ($1.94), Fort Lauderdale ($1.90)
- Least expensive metro markets – Jacksonville ($1.62), Punta Gorda ($1.65), Panama City ($1.65)
Find Florida Gas Prices
- Daily gas price averages can be found at Gasprices.aaa.com
- State and metro averages can be found here
AAA GAS PRICE AVERAGES
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Gas Price Survey Methodology
AAA updates fuel price averages daily at www.GasPrices.AAA.com. Every day up to 130,000 stations are surveyed based on credit card swipes and direct feeds in cooperation with the Oil Price Information Service (OPIS) and Wright Express for unmatched statistical reliability. All average retail prices in this report are for a gallon of regular, unleaded gasoline.
About AAA - The Auto Club Group
The Auto Club Group (ACG) is the second largest AAA club in North America. ACG and its affiliates provide membership, insurance, banking, financial services, and travel offerings to over 13.5 million members across 13 U.S. states, the province of Quebec and two U.S. territories including Florida, Georgia, Iowa, Michigan, Nebraska, North Carolina, North Dakota, Tennessee, Wisconsin, Puerto Rico, South Carolina and the U.S. Virgin Islands; most of Illinois and Minnesota; and a portion of Indiana. ACG belongs to the national AAA federation with more than 60 million members in the United States and Canada whose mission includes protecting and advancing freedom of mobility and improving traffic safety. Motorists can map a route, identify gas prices, find discounts, book a hotel, and access AAA roadside assistance with the AAA Mobile app for iPhone, iPad and Android. Learn more at AAA.com/mobile. Visit AAA on the Internet at AAA.com.