Officials say coronavirus causing lower oil demand, gas prices

Eight of the 10 cheapest gas prices in Ohio on Tuesday were located at area stations with prices ranging from $1.79 to $1.86 a gallon, and officials are saying lower prices are due to the effects of the coronavirus.

Last week crude oil futures lost more than 16 percent, the largest decline in more than 11 years, according to Oil Price Information Service data. The week ended with crude oil prices at their lowest levels since December 2018. Since gasoline prices are largely tied to crude prices, prices are falling at the pump, said Kimberly Schwind, spokeswoman for AAA Ohio Auto Club.

She said the low prices are tied to the “demand destruction” and fears of further damage caused by the coronavirus.

While markets and crude oil prices advanced the past couple days, it’s difficult to say if they will continue advancing or fall back again, Schwind said. Some of the recent optimism is tied to the OPEC+ meeting that will take place later this week where OPEC+ is expected to cut production to help rebalance the market, she said.

Gas was selling at $1.79 a gallon — the cheapest in the state, according to GasBuddy.com — at Casey’s on Wayne-Madison Road in Trenton, while several stations on Oxford State Road in Lemon Twp., were selling gas at $1.80, 44 cents below the state’s average.

Melissa Fay, store manager at Casey’s, said the store was having “a very productive day” Tuesday because of the cheap gas prices and increased sale of hot foods there. She said prices are set at the store’s corporate office in Iowa and officials try to be “very, very competitive.”

Fay said customers from around the county call her to check on gas prices.

But, she said, Casey’s is more than a cheap gas station.

“We’re a restaurant that sells gas,” said Fay.

Patrick DeHaan, head of petroleum analysis for the web site GasBuddy, is pointing to the coronavirus, which has markedly depressed oil prices.

“If this does spread, if this does really hit the U.S., it’s going to mean demand destruction,” he said. “People will be staying home from work, school, they won’t be traveling. The trickle down would be that it would reduce oil demand noticeably in the world’s largest oil consumer.”

Twenty-six states on Monday morning have at least one gas station selling prices below $2 a gallon, he said.

Demand for fuel has fallen some 20 percent in China, as flights have been cancelled, factories have been closed and people are staying home in quarantined communities.

So what’s ahead? No one has a crystal ball, but DeHaan expects oil prices generally to follow stock prices. As stocks rise, so should oil prices.

“Their fate is tied together with the coronavirus,” he said. “If you see the Dow shoot up, oil prices are going along with it.”

LOCAL CHEAP GAS PRICES

$1.79: Casey's, Wayne-Madison Road, Trenton

$1.80: Speedway, Oxford State Road, Lemon Twp.

$1.80: Sunoco, Oxford State Road, Lemon Twp.

$1.80: Kroger, Oxford State Road, Lemon Twp.

$1.85: IGA, West State Street, Trenton

$1.86: UDF, Central Avenue, Springboro

SOURCE: GasBuddy.com

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