Demand for gasoline at 52-year low as prices continue to drop

CHARLESTON, W.Va. — The historic drop in gasoline prices in recent weeks doesn’t appear to be leveling off and one travel expert says $1.00 a gallon could start to be part of the discussion.

The average price for a gallon of gas in West Virginia Thursday was $1.81, down 86-cents a gallon from a year ago.

Jim Garrity

AAA East Central Public and Community Relations Manager Jim Garrity said low prices for crude oil and the lowest demand for gas since the 1960s have formed the perfect storm.

“As long as we have these factors in place with low demand, a big supply of oil and cheap oil at that, it stands to reason that prices could go even lower,” Garrity said.

Many factors go into determining the price of gasoline. Garrity said 50 percent of the gallon price is determined by the price for a barrel of crude oil. He said those prices had been at around $60 a barrel and are now down to $20 a barrel.

“When goes up or down by a dollar or two a barrel, you tend to see that at the pump. When you see oil go down 30, 40, 50 percent virtually overnight there’s a major effect at the pump,” Garrity said.

Combine that with demand that’s at its lowest level in 52 years and you have diving prices.

Could it reach $1.00 a gallon?

“If this continues go lower that’s going to start crawl closer and closer to a dollar,” Garrity said. “We can’t say that it’s going to hit that but we can say, ‘I wonder how close it’s going to get?'”

Garrity said it’s not that people aren’t traveling because of the pandemic but neither are they going to work or anywhere else for that matter as they observe stay-at-home orders.

“When you have a lot of people driving to work that’s in and of itself a big portion of the demand,” he said.

When will the climb begin? Garrity said it’s pure speculation at this point.

“You have to look at it on a day-by-day basis because it’s so unprecedented,” he said.

The lowest county average for gasoline in West Virginia Thursday was $1.56 a gallon.

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