Like most commodities, the price of gasoline varies with the balance of supply and demand. Since the coronavirus hit China, demand has been ebbing. (Photo by Joe Raedle/Getty Images)
Photo: Joe Raedle
Photo: Joe Raedle

Some metro Atlanta gas prices slip below $2; virus chills demand

Gas prices in Atlanta dropped this week to below $2 a gallon a global coronavirus outbreak saps demand for energy, sending world prices tumbling.

Weeks of factory shutdowns in China, along with virtual lockdowns of large regions of the country, were enough to dramatically slash the world’s demand for oil and gasoline.

While the Chinese government is reporting that the spread of the virus has dramatically slowed, the disease is now affecting other countries and their economies.

“How low prices go and how long they are depressed – everything is about the coronavirus,” said Patrick DeHaan, senior petroleum analyst for Gas Buddy, which tracks gas prices nationally. “How far we go down depends on how much worse it gets.”

As usual, there are drastic price difference in metro Atlanta.

Tied for the lowest prices were a Costco and a Sam’s Club in Buford and a Marathon in Stockbridge – all charging $1.95 a gallon. In contrast, a Shell in Acworth near I-75 was charging $3.04 a gallon, according to GasBuddy.

The average price for metro Atlanta was $2.21 a gallon on Thursday. The region’s average has not slipped below $2 since early 2016, according to Gas Buddy.

While gas prices are affected by many factors, the biggest component is the price of its major ingredient — oil. The going rate for American refinery oil has fallen from more than $62 a barrel in early January to less than $45 a barrel.

In an effort to keep prices from dropping too far, the Organization of Petroleum States announced Thursday a tentative plan to cut back on production.

OPEC, which accounts for one-third of global production, has often had trouble getting its members to comply with deals, since they are giving up revenue. But even if they do close some spigots, the impact on the balance of supply and demand – and on prices – may not trickle through to pumps for months.

There’s also not likely to be a spike on the demand side in the United States, even though lower prices spur consumers to use more of a commodity.

Because it is March, and schools are still in session, families are not likely to use cheap gas as an excuse to hit the road, DeHaan said. “If this were the middle of the summer, it would be a totally different story.”

Moreover, the rising fear of coronavirus contagion has spurred many companies to encourage teleworking and has made some people leery of public exposure, DeHaan said. “I think people are more likely to be locked down, not trying to flee their homes.”

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