Motorists could see Florida gas prices return to under $3 a gallon in the coming weeks, as officials from the American Automobile Association (AAA) say concerns over the surge of the COVID-19 Omicron variant will likely halt demand for fuel.
According to AAA, the price at the pump has continued to drop after reaching its 2021 peak four weeks ago in November, where the average price per gallon was almost $4. In the weeks since the average price per gallon dropped 21%.
Two weeks ago, the average price per gallon was $3.34 and dropped down to $3.30 last week. The average price per gallon on Monday was $3.29 and on Tuesday dropped to $3.28, representing a gradual decrease in fuel prices to 1 cent per day.
Highlighting the daily 1 cent decrease rate and the cost per barrel of crude oil, AAA spokesman Mark Jenkins spoke about the gradual decrease, stating, “An oil price drop of that magnitude, if sustained, could potentially drive the state average back below $3 a gallon, … But it won’t happen overnight. Florida pump prices are falling at a rate of 1 cent a day. Unless that rate accelerates, it could take a few more weeks before pump prices fully adjust.”
However, in a separate press release , another AAA spokesperson, Andrew Gross, stated, “Consumers may be catching a break at the pump right now, but it’s not for a very good reason, … A potential COVID-19 induced economic slowdown hurts everyone and could prompt OPEC [the Organization of the Petroleum Exporting Countries] to slash production if oil prices drop too low.”
Last Thursday, OPEC and its umbrella organization, OPEC+, announced its plan to raise production of crude oil by 400,000 barrels per day, beginning in January. According to the AAA release, the move was likely in response to the Biden administration’s call to increase supply to tame high fuel prices.
Citing data from the Energy Information Administration (EIA), the release also states that the total domestic gasoline stocks increased by more than 4 million barrels of oil last week, while demand dropped from 9.3 million barrels of oil per day to 8.8 million barrels of oil a day, causing the price per gallon to drop.
The national average price per gallon is six cents more than average price in Florida, sitting at $3.34.
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