Barring any unforeseen circumstances, gas prices will keep going down. GasBuddy says prices will likely get below $2 per gallon soon.
There was a small increase in prices last week. Some stations went from below $2 to $2.15. That won’t be the case this week.
“Higher oil prices caused most states to see gas prices inch higher, with the national average rising ever so slightly in the last week, breaking its three week streak of declines,” says Patrick DeHaan, head of petroleum analysis for GasBuddy. “We should slip back under $2 later this week, so long as there is no large jump in the price of oil, which sits at about $40 per barrel (as of Monday morning).”
The drag on gasoline demand has been fueled by the coronavirus.
“That drag will continue until there is some sort of improvement. I really only think, at this point, improvement can be delivered by some sort of vaccine,” says DeHaan. “Even then a vaccine may not be the Holy Grail. Schools are going to be out of session for months, if not the rest of the year already. We may not get back to ‘normal’ for months.”
Trilby Lundberg, oil and gas analyst for the Lundberg Survey, agreed with DeHaan.
“We still have very abundant gasoline supply. We have demand being hit awfully hard. It’s not only a seasonal decline this time of year. We also have a very weak economy with unemployment claims up,” says Lundberg.
DeHaan has said several times that hurricanes can cause an increase in gas prices throughout the country, but right now there does not appear to be a serious hurricane on the horizon.
“At least for now, the tropics are quiet. Nothing is on the map. Things have cooled off, but keep in mind that hurricane season goes for another two months. That remains on the radar,” says DeHaan.
The temperature also has a lot to do with lower demand as well.
“As we get into the cooler and coldest months, we have more potential to go deeper into the $1 per gallon territory. You’ll see more of those sub-$2 prices pop up the cooler the temperatures get,” says DeHaan. “Right now, the longer you wait to fill up, the more likely you are to save a few cents.”