Oil prices have been historically low for a while and uncharacteristically stable. But earlier this month, after negotiations broke down. Russia told OPEC to “go screw” on production quotas. Saudi Arabia said much the same, and a price war broke out.
This drove the price of oil down which is good news for the cost of energy and gasoline. But then the Coronavirus lockdowns began. As economies and travel slowed the existing glut grew bigger. And now we’ve got so much excess supply – with demand on hold for several weeks – that crude futures have fallen to $20.00/barrel.
Here are some boring numbers for you.
Brent crude LCOc1 was trading down $2.68, or 9.3%, at $26.05 a barrel after dropping as low as $26.65, weakest since late 2003.
U.S. crude CLc1 was down $4, or 15%, at $22.95 a barrel by 11:08 EDT (15:08 GMT). The session low was the lowest since March 2002.
The last time oil traded at these levels, China had just begun its rise as a global economic superpower, which later propelled world oil consumption to record highs.
Demand is way down and so is the price. The Russians and Saudi’s are still having their price war. And The Kingdom continues to pump out over 12 million barrels per day.
People may experience some of the lowest gas prices they have ever seen in their lives. If they get out and go somewhere. Maybe to perk up the local economy with a bit of restaurant pick up or curbside. So, enjoy them while they last.
But under no circumstance is this an excuse to allow for new gas taxes be they statewide or the regional variety. Climate rhetoric-driven emissions reductions is still fraud. It is about advancing socialist economics, not the environment. Besides, gas prices will go back up. When they do, the last thing we need is politicians and bureaucrats siphoning off another chunk of our weekly pay.