Prices plunge below $2 a gallon in Houston this week.
Fears of the COVID-19 outbreak has resulted in a reduced demand for energy. Restricted travel and closed borders have meant less of a need for oil and gasoline, consequently, the prices of gas have sunk below $2 in Houston! [Featured image: @deathclutch108]
In reaction to the reduced demand, both Saudi Arabia and Russia flooded the market with high quantities of oil at low prices, with the cost per barrel of oil dropping by 23 percent. In Houston, prices sank 10 cents a gallon and as of today, according to GasBuddy, the cost of gas has dropped to as low as $1.49 in parts of the city.
The national average price of gasoline has seen one of its biggest weekly declines in the last decade due to the oil price war between Saudi Arabia and Russia as well as weakened demand from COVID-19. Additional insights: https://t.co/UwNtWUeHfy pic.twitter.com/AzKIodWQq7
— GasBuddy (@GasBuddy) March 16, 2020
Prices nationally are averaging at about $2.21 per gallon, but for Houston the average is even lower at about $1.92 per gallon.
Something positive. Here in Houston gas prices are below 2 dlls per gallon
— Betsy Vazquez (@vazquez_betsy) March 13, 2020
But while lower gas prices might be welcome to many during this troubling time, the local and global effects of the COVID-19 have left the market in a shaky condition. Enterprises up and down the scale have had to bear the brunt of reduced business. This includes the US energy sector, which employees over 6 million Americans. As the prices descend, it could mean layoffs.
According to Forbes, there are “175,000 Houston-based employees working directly in production, oil services and machinery and fabricated metals, and tens of thousands more serve as suppliers or contractors.”
“What’s going on with oil is the price has been falling because, as investors anticipate less travel, less demand for energy, fewer flights, less driving, few factories running, these require energy,” said Seth Sutel, The Associated Press Deputy Markets Editor. With the oil industry in jeopardy, many are concerned about a potential oil bust, and, furthermore, how its consequences would affect the city, state, and nation’s economy.