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Everywhere you look, it seems like things have taken a turn for the worst. The coronavirus crisis has wreaked havoc across markets. The U.S. political system is in a frenzy. OPEC is crumbling. Geopolitical tensions are reaching a boiling point. Vacations are stuck in limbo. And our favorite technology is being used against us. But at least you’ll be able to hop in the car and drive as far away from all of those problems as you want. Gas is cheap. Cheaper than it’s been in quite some time, in fact.
The national average for a gallon of gasoline is sitting at a comfy $2.40. That’s a whole $1.70 cheaper than the record highs set back in 2008, and a $0.20 cheaper than GasBuddy’s yearly projections. And in the deep south, gas prices are even cheaper. In Mississippi, Louisiana and Texas, some gas stations are posting prices as low as $2.01.
GasBuddy's senior petroleum analyst Patrick DeHaan said the spreading respiratory illness triggered a drop in global demand that could benefit domestic motorists for weeks to come.
“Tens of thousands of flights have been canceled, people have been told to stay from school and work, and now that’s spreading,” DeHaan said. “What you’re seeing is a reduction in oil demand globally that has pushed the price of oil down.”
Related: OPEC To Russia: It’s Over
So What’s Behind The Cheap Fuel?
The first and most obvious factor is the price of crude oil has plummeted since the beginning of the year. Brent prices have fallen from a high of $70.25 in early January to $46.12 today. And some say that the downward spiral isn’t finished just yet.
With OPEC failing to come to an agreement over further cuts, and the cartel looking exceedingly likely to end its short-lived relationship with Russia, things are likely to get worse for oil before they get better.
On top of the OPEC drama unfolding, the coronavirus crisis has sent panic through traders across the globe. Hedge funds, investors and traders are piling back into safe haven assets.
That being said, if you’re looking at the glass half full, your commute just got a lot cheaper, and as driving season inches closer, it might be time to ditch the cruise you had planned, and start looking for an escape across America’s beautiful highways.
By Michael Kern for Oilprice.com
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Michael Kern is a newswriter and editor at Safehaven.com and Oilprice.com,