Gas prices to stay cheap for foreseeable future

by Jordyn Pair · Apr 22nd, 2020 7:47 am

Gas prices are expected to stay low as states stay shut down due to the coronavirus pandemic.

Future contracts for May decreased 24% this year to 51.03 cents per gallon, meaning gas prices are likely to continue to drop below the national average of $1.80 per gallon. That price is down from $2.84 a year earlier, according to AAA.

"The consumer can expect these low prices to persist over the next three months because the oil market continues to be overwhelmed with supply," Andrew Lipow, president of consulting firm Lipow Oil Associates, told FOX Business. "It's not until demand begins its long road to recovery that we're going to see gasoline prices beginning to go up. Looking out forward, there is a moderate increase in gasoline futures prices, which is a reflection of the anticipation that the economy will begin to open up, resulting in an improvement in demand."

Although gas is hovering around an average of $1.80 nationally, some places are seeing prices as low as 90 cents per gallon.

The U.S. Energy Information Administration says U.S. gasoline consumption will fall by 19% during the second quarter and that prices may fall to $1.58 per gallon between April and September, 42% lower than last year.

The low gas prices may make travel more appealing.

"They absolutely drive more when prices are low," Paul Sankey, managing director at Mizuho Securities, told FOX Business. "Sales of electric cars, efficiency of typical cars, and even levels of employment are far less important to demand than the price at the pump."


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