Oil Market In Turmoil, Gas Prices Expected to Continue Falling

UNDATED -- Gas prices could continue to fall with the oil market in turmoil. Collapsing demand for fuel during the COVID-19 pandemic has created a glut of oil, with storage capacity running short.

Gasbuddy.com spokesman Patrick DeHaan says the cost to have a barrel of crude delivered in May was in the negative numbers Monday, which has never happened before.

Truly an unprecedented time in the industry that we are seeing negative prices because there's simply not enough room to store oil.

DeHaan says crude oil prices for the June contract is also falling.

The more actively traded June contract, which becomes active today, is trading at about $16 a barrel, now that's down $4 this morning, and along with it wholesale gas prices are down another 10 cents a gallon this morning.

GasBuddy says demand for gasoline remains anemic at 5.08 million barrels per day.

The cheapest gas prices in the St. Cloud metro area range from $1.14 to $1.39.

DeHaan says for eight straight weeks the national average for the price of gas has dropped. As of Monday, the median U.S. price was $1.69 a gallon. However, because it is taking a while for individual gas stations to go through their supply of gas, the price at the pump is dropping more slowly than you might expect.

Stations are not selling as much gasoline, and the gasoline that they did buy may have been from a week or two ago at a higher price, so there may be some reluctance to lower their price given that they are not able to sell through that pricier inventory.  So, if you're a motorist and you don't need gas, I'd wait to fill up.

He says gas could go down another 20 to 40 cents per gallon in the coming weeks.  DeHaan doesn't see a turn around until people start to get back to work.