Coronavirus fears fuel continued drop in gasoline prices

Kroger gas station on Concord Road and South Cobb Drive in article about gasoline price plungeKroger gas station on Concord Road and South Cobb Drive (the photo was taken last year, so the prices are outdated)-- photo by Larry Felton Johnson

In part because of the effect of coronavirus fears on world oil prices, gasoline prices in Georgia have continued to drop over the past week.

According to a press release from Montrae Waiters, spokeswoman for the AAA – The Auto Club Group, Georgia gas prices  dropped five cents at the pump compared to last week. Georgians are now paying an average price of $2.21 per gallon for regular unleaded. Monday’s state average is 5 cents less than a week ago.

“Pump prices are likely to decrease through the end of the winter driving season, especially amid concerns about the coronavirus causing the price of crude to decline,” said Waiters. “However, the current refinery maintenance season could put pressure on regional refinery utilization, supply and gas prices during the run-up to the spring driving season.”

Reasons for the drop

AAA wrote that higher-than-average stocks of gasoline plus the drop in oil prices set the stage for the decrease.

“In its latest weekly report, the Energy Information Administration revealed that total domestic stocks of gasoline fell by 4.3 million barrels to 252 million barrels, which is still 1.3 million barrels higher than 2019’s level at this time,” AAA wrote.

The Organization of the Petroleum Exporting Countries (OPEC) is meeting in Vienna.

OPEC has tentatively agreed to reduce crude output by an additional 1.5 million barrels per day in the second quarter of 2020, which could help lift crude oil prices by limiting supply as the impact of the coronavirus decreases global crude demand.

“However, OPEC’s deal is conditional on Russia and other major crude producers signing up to reduce output, too. Until it appears that the threat from the virus decreases, crude prices are likely to continue facing downward pressure,” wrote AAA.

As of yesterday evening, the Washington Post wrote that Russia was balking at the deal, causing steep drops in the markets worldwide.

Cobb County gasoline prices

As of this morning the AAA gasoline price page for Georgia reports the average price of a gallon of unleaded in Cobb County is $2.15.

It is always possible to find lower gas prices than the average by comparison shopping or using tools like http://gasbuddy.com.

How does AAA determine gas prices?

AAA explains it’s methodology for collecting data on gasoline prices at the pump as follows:

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.

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