Fuel has taken one of the hardest hits it has ever undergone. From the massive production of fuel, to the closing of stores, businesses and travel due to COVID-19.
Fuel Prices Dropped At The Start of 2020
The start of 2020 looked good for two of the largest oil producers in the world: Saudi Arabia and Russia. They went into a head-to-head battle for the highest production. This inherently would drive down the price and encourage drivers to go out and spend more.
Things were heading that direction until COVID-19 locked the world inside itself. With little to no driving, except for essential supplies, many people are simply staying indoors.
This led to the almost complete destruction of the oil industry. As stockpiles of crude oil were piling up, the cost was driven down. The current price is still extremely low.
States See Increase Oil Costs
America is in a bind. Currently, states have decided to reopen with extreme precaution. This has brought people back to work, thus driving their cars has picked up momentum. Driving your car means paying for gas. In these specific states and major cities, fuel costs have gone up. Now, these prices aren’t jumping back to their average high price, but they are making their moves back to normal. It will take a considerable amount of time, but they need to get rid of the excess fuel before they can regulate the price to accommodate entire countries.
With the price still low, many are taking advantage by stocking up fuel reserves in their back yards. The modern world has yet to see an event like COVID-19 transpire. Thus many are preparing for the worst. While a few states are currently reopening, others are doubling down on their stay-in-place procedures. It may take a while for gas to come back to normal prices, but it may take longer for states to reopen.