GRAND RAPIDS, Mich. — Analysts with GasBuddy, a group that monitors gas and oil prices throughout the United States, expect prices at the pump to continue falling due to concerns over the COVID-19 virus and an escalating price war between Russia and Saudi Arabia.
The prices consumers here in West Michigan are seeing this morning at the pump are already down almost 13% compared to a week ago, according to Allison Mac, the communications director for GasBuddy.
Mac says the drop comes down to supply and demand in within the oil market. As of Monday morning, Mac says the price of a barrel of oil was down to about $32.
"When we look at countries like China, which basically is shut down not using any oil, we’re seeing prices drop on the oil level and therefore on the gasoline levels, it’s been following," Mac told FOX 17 Monday.
But Mac says there are other factors affecting the price drop, such as the ongoing price war between Russia and Saudi Arabia.
"These big oil -producing countries have actually gotten together to be like, hey we’ve got to do something about this supply, the world is being flooded with oil at a time where no one is using oil. So we really need to hold back production," Mac said, "but they just couldn’t reach an agreement. So, Russia is refusing to hold back production, Saudi Arabia is refusing to hold back production."
Mac says because of these multiple factors, we are seeing an unprecedented situation.
"When we go back 17 years and we look at the SARS scare, that was pretty much isolated in just the Asian countries... and this is so widespread and because it's spreading so quickly and because there are so many unknowns, this is really driving prices down in a way that we have not seen before," she said.
Mac says she predicts oil prices will continue to fall for the near future.
"I think by the end of this week in Michigan, the national average is going to drop below 2 dollars a gallon. And it will probably continue to drop until something happens," she said.
You can visit GasBuddy's website for the latest prices in West Michigan and throughout the rest of the country.