Demand Destruction Reigns Supreme as Pump Prices Push Cheaper

No Immediate Impact to Pump Prices Expected with OPEC+ Historic Global Reduction

13 April 2020

AURORA, Ill., (April 13, 2020) – The national gas price average has steadily declined for seven weeks, pushing the average cheaper by 61-cents to $1.86 today. During this timeframe (since late February), U.S. demand for gasoline has decreased 44% to 5 million b/d as gasoline inventories build across the country.

“We are seeing fast and furious gasoline demand destruction. The latest data reveals demand levels not seen since spring of 1968,” said Molly Hart spokesperson for AAA – The Auto Club Group. “Every U.S. region is seeing builds in gasoline inventories and crude storage, which is just driving pump prices even cheaper.”

On Sunday, the Organization of the Petroleum Exporting Countries plus (OPEC+), led by Saudi Arabia, announced historic global crude productions cuts – nearly 10 million b/d in May and June.

“While the production cut is historic, it’s likely to not have an immediate impact on pump prices given the ongoing impact the COVID-19 pandemic continues to have on crude oil prices and gasoline demand,” added Hart.

At $1.86, today’s national average is 6-cents less than last week, 44-cents cheaper than a month ago and nearly $1 less than a year ago.

Indiana is one of the top ten least expensive markets at $1.54.

 

Monday

Sunday

Week Ago

Month Ago

One Year Ago

National

$1.862

$1.866

$1.929

$2.303

$2.823

Chicago Metro

$2.020

$2.025

$2.089

$2.507

$3.102

Chicago City

$2.240

$2.235

$2.319

$2.798

$3.306

Bloomington

$1.707

$1.702

$1.730

$2.076

$2.794

Champaign

$1.901

$1.908

$1.966

$2.277

$2.787

Peoria

$1.891

$1.894

$1.964

$2.368

$2.753

Rockford

$1.682

$1.688

$1.757

$2.240

$2.814

Springfield

$1.476

$1.495

$1.580

$2.079

$2.854

Fort Wayne, IN

$1.421

$1.425

$1.527

$1.972

$2.913

South Bend IN

$1.346

$1.345

$1.425

$1.933

$2.921

Click here to view current gasoline price averages

 

Oil Market Dynamics

At the end of Thursday’s formal trading session, WTI decreased by $2.33 to settle at $22.76 per barrel. Crude prices were volatile last week, during the run-up to OPEC’s historic agreement with its allies, including Russia. The group met to discuss global crude productions cuts of up to 9.7 million b/d for May and June 2020. Under the new production reduction agreement, OPEC and its allies expect total global oil cuts to amount to more than 20 million b/d or 20 percent of global supply. Effective May 1, the production cuts are expected to ease in June, but some restrictions will remain in place through April 2022.

Crude prices will likely remain volatile this week, as the market assesses if the production cuts are sufficient to hold back growing global crude inventories as COVID-19 continues to push down demand.

Motorists can find current gas prices along their route with the free AAA Mobile app for iPhone, iPad and Android. The app can also be used to map a route, find discounts, book a hotel and access AAA roadside assistance. Learn more at AAA.com/mobile

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