Two recent events have led to some good news at Northwoods gas pumps: Saudi Arabia's demand to cut oil production that backfired and the coronavirus causing fewer people globally to be driving and flying.
The website gasbuddy.com keeps watch on the price of oil and gas. Spokesperson Allison Mac explains it's a tried-and-true reason: supply and demand...
"The coronavirus has locked down multiple countries like China and Italy. When these countries are locked down people are not driving, they're not flying, there's really no need for oil. Which is why we're seeing the demand for oil drop dramatically more and more everyday. Because of that, prices have dropped as well..."
A recent oil producers meeting in Vienna concluded with no agreement, as Saudi Arabia and Russia got into a spat and left the meeting without an agreement. Mac says the reaction at the pump in the U.S. was nearly immediate...
"They couldn't reach an agreement. They walked away from that meeting angry with each other. Because of that, we saw a huge drop in oil prices earlier this week, which is now at $33 a barrel, which is very low. That's why we saw prices at the street level drop as well...."
Mac thinks until Saudi Arabia and Russia, the two nations behind the U.S. in oil production, reach an agreement, prices will continue to drop.
Mac says the national price average is $2.32, ten cents lower than last week. In the Northwoods, the lowest price is near $2.30 per gallon for regular unleaded.
