Fuel prices down, so fuel up
A driver fills up their vehicle in Coeur d’Alene on Monday. Gas prices have been falling in Idaho to their lowest levels in years.
BILL BULEY/Press
Kootenai County gas falls to lowest levels in years
COEUR d’ALENE — How low will they go?
That’s what some are wondering as gas prices across the country and in Idaho continue plummeting to prices not seen for years.
One year ago in Coeur d’Alene, a gallon of regular unleaded gas went for $2.79. Five years ago, it was $2.29.
Monday, prices were in the $1.70 range at many stations in Kootenai County, at least one as low as $1.65. With the extra discount for shopping offered by stores like Fred Meyer, prices were close to $1.50.
The average price statewide is $2.02, which is 53 cents less than a month ago and 72 cents less than a year ago. Meanwhile, the U.S. average price is $1.86, which is 44 cents less than a month ago and nearly a dollar cheaper than a year ago.
AAA expects the national average to drop as low as $1.70 per gallon in the coming weeks, and Idaho could reach $1.85 per gallon if current trends continue, with Coeur d’Alene prices possibly closing in on the $1.50 mark. Today, Wisconsin, at $1.30, has the cheapest gas prices, and Idaho currently ranks 13th in the country for most expensive fuel.
“Well, at least gas is a bargain,” said Nancy Lewis as she filled up her SUV in Coeur d’Alene. “We can certainly use it.”
The decline may end there.
“We don’t have any indication at this time that local prices will reach the $1 mark,” AAA Idaho’s Matthew Conde wrote. “That being said, AAA has had to update its gas price projections due to some unprecedented market conditions, so despite our best estimates, ‘never say never’ also has to be part of any conversation these days.”
The reason? COVID-19.
“Obviously, stay-home orders and other efforts to reduce the spread of coronavirus are having a big impact on travel demand, and even the normal commute,” Conde said. “In recent weeks, U.S. demand for gasoline has decreased by 44 percent to just five million barrels per day. Shockingly, the demand hasn’t been that low since the spring of 1968.”
Other prices around Idaho, per AAA: Boise — $2.07; Franklin — $2.23; Idaho Falls — $1.93; Lewiston — $1.97; Pocatello — $2.08; Twin Falls — $2.11.
Gasoline and crude oil stocks continue to build in every region across the country, even as refineries have reduced their production capacity to roughly 70 percent — “extraordinarily low for this time of year,” Conde said.
The Organization of the Petroleum Exporting Countries recently negotiated the end of a crude oil price war between Saudi Arabia and Russia, with member nations agreeing to historic production cuts that will remain in effect until at least the spring of 2022.
In addition to the 10-million-barrel-per-day reduction that was already in place, participants agreed to cut an additional 10 million barrels in May and June, about eight million b/d from July 1 through the end of 2020, and six million b/d from Jan. 1, 2021 through April 30, 2022.
“In the short run, OPEC’s efforts to remove the oversupply of crude oil from the market will be fairly ineffective,” Conde explained. “But when the pandemic ends and millions of people with cabin fever are able to travel and get back to their normal work routine, crude oil prices could rally in dramatic fashion, pushing gas prices higher in a very short time period.”
Today, the West Texas Intermediate benchmark for crude oil is trading near $23 per barrel, which is $11 less than a month ago and $41 less than a year ago. Under normal conditions, crude oil prices make up about 50 percent of the price of gasoline.