Thanks to the coronavirus pandemic and international trade wars, gas prices continue to drop across Florida according to a new report from AAA.
On Sunday, the average gallon of gas in Florida cost $1.86, six cents lower from the week before and just below the national average of $1.87 a gallon. But AAA added that prices could change again due to a new international oil deal.
“How much lower gas prices go will depend on how the market responds to a historic deal made by OPEC and its oil producing allies over the weekend,” AAA noted. “On Sunday, OPEC and its allies agreed to cut oil production by 9.7 million barrels per day – the single largest output cut in history. This effectively ends a price war that broke out between Saudi Arabia and Russia, which caused an overnight 25 percent reduction in oil prices last month. From there, the downward trend continued as the effects of the coronavirus impacted the global economy and forced Americans to stay off the road.”
“In total, oil prices are down 56 percent since February 21. During that time, the price of crude plummeted from $53 per barrel to $23/b. Florida gas prices also dropped 56 cents. This deal is an attempt to help eliminate supply surpluses and strengthen the price of crude,” AAA added.
“The OPEC deal should not cause gas prices to suddenly spike, but it will affect how low they can go,” said Mark Jenkins, a spokesman for AAA and the Auto Club Group. “Wholesale gas prices suggest the state average could eventually reach $1.50 or below, but that won’t happen if oil prices gain upward momentum.”
“In Florida alone, gasoline demand is down as much as 50 percent in large cities, as residents self-isolate at home. The longer demand is down, the more crude and gasoline supplies will build; and it will take some time for drivers to work through all that, once the stay-at-home orders are lifted. As of this writing, the US benchmark for oil prices increased by more than $1.50 per barrel in overnight trading,” AAA noted.
In the meantime, most gas stations in Florida–91 percent–are selling gas at less than $2 a gallon.
Gainesville had the most expensive gas in Florida with an average of $2.05 a gallon followed by West Palm Beach at $2.02 a gallon and Miami at $1.97 a gallon.
Jacksonville had the least expensive gas in the state on Sunday with an average of $1.72 a gallon followed by Panama City at $1.73 a gallon and Punta Gorda at $1.74 a gallon.