Oil and gas is 'done' for 2020, energy economist says; gas as low as $1.29 per gallon in LouisianaThe Advocate, Baton Rouge, La. — Ken Stickney The Advocate, Baton Rouge, La.
March 25-- Mar. 25--Here's a hot consumer tip from a national petroleum analyst: Don't fill your tank for a bargain; pump prices may be lower tomorrow, too.
Patrick DeHaan, of GasBuddy, the national consumer website, said gas prices have been leaking all month and no one's found the plug.
"Gas prices have spent virtually all of March marching lower, with the drop continuing as the coronavirus destroys oil demand globally, leading to the lowest oil prices we've seen in 18 years, paving the way for still an additional 35-75 cent per gallon drop at most stations in the weeks ahead," he said.
Here's what that means:
-- For the fourth consecutive week, the national pump prices dropped, this time by 12.8 cents to a national average of $2.08 per gallon.
-- The West Texas Intermediate crude oil price hit a low of $22.91 a barrel Wednesday.
-- There's been talking of cutting oil production through the Texas Railroad Commission. That hasn't happened in more than 40 years.
Here's how that affected prices in Louisiana:
-- Three stations in Shreveport, one in Baton Rouge were selling gas for $1.29 a gallon Wednesday.
-- In Lafayette, Sam's Club, 3222 Ambassador Caffery, and Costco, 201 Farm Meadow Road, were both selling a gallon of unleaded at $1.55 Wednesday, the low price in town.
DeHaan said 99-cent gas is a possibility this year, and it may be more widespread than previously believed.
David Dismukes, executive director and a professor at LSU's Center for Energy Studies, said the problems are well known: The novel coronavirus is keeping much of the country and much of the world's people at home and depressing demand for gasoline, while production rivals Saudi Arabia and Russia have engaged in an untimely petroleum war, flooding the market with oil and suppressing prices.
"It's an uncertain situation right now," Dismukes said. "You're not going to fix OPEC -- they don't meet until June."
And the coronavirus? Well, that's anyone's guess.
Dismukes said energy is taking a pounding around Louisiana, including petrochemicals. If he didn't discern bright spots, he saw faint signs for hope, including the president's optimism for an earlier revival for the economy and the confidence that generates. Congress' stimulus package will help.
"We've had two good days in equities and commodity markets," he said. "We need to continue building confidence."
He said the markets seem to want to lift -- oil prices were bumping up toward $25 a barrel later in the day Wednesday and they could recover another $5 a barrel or so. But Dismukes said the best advice for those in the business is to hunker down.
The double whammy of the global pandemic and the oil glut generated by the Saudis and Russians have undercut the chances of rapid recovery for energy.
"For 2020, it's kind of done," he said. "Stick a fork in it."
Those in the energy industry may be hoping to weather the year and hope for more come 2021. There are, he said, no quick fixes.
"We are in a global energy economy," he said, where protectionism, such as tariffs, fails. The recovery may mean that oil and gas will have fewer, stronger players.
"Don't try to change the world, but survive the next six to eight months," he said he'd advise those in the industry. "There is no pie in the sky."
(c)2020 The Advocate, Baton Rouge, La.
Visit The Advocate, Baton Rouge, La. at www.theadvocate.com
Distributed by Tribune Content Agency, LLC.