STATEWIDE–What you’ll pay at the gas pump will nearly completely depend on what happens with the coronavirus, says GasBuddy.
“Gas prices are tied to recovery. If we recover (from the coronavirus), so will gas prices. If we don’t recover, gas prices won’t either,” says Patrick DeHaan, Head of Petroleum Analysis for GasBuddy.
DeHaan says with more states re-opening, demand is increasing. As of Monday morning in Indiana, the statewide average for gas is $1.86. That’s up 25 cents from where it was May 4.
“Demand on Sunday (May 10) was up 2% from the Sunday before and is now up 45% from the lowest Sunday, but it’s still about 33% below March 15. We are starting to see more people on the road,” says DeHaan.
He says there is a big “wild card” that people are not considering when they look at oil prices.
“You have to look at the refineries that process that oil. They had slowed down greatly about a month and a half ago running less crude oil. That is leaving more of that crude oil on the market to depress the price. That’s where the disconnect is coming in. Refineries need to get back into the game as demand starts to go back up. That is part of the reason why prices have surged so quickly,” says DeHaan.
DeHaan says he is starting to see refinery utilization increase slightly.
“In the last week, refineries utilized about 70.5% of capacity. That was up a percentage point from the prior week. Gasoline production, though, decreased. Usually at this time of year, refineries are producing almost 3 million barrels a day of gasoline more than what they’re doing right now. I do expect refineries have seen the recovery and will start to slowly ramp up output, but they want to be cautious that there is not a second wave (of coronavirus) that contributes to a large decline in prices again,” says DeHaan.
On May 11, 2019, the average in Indianapolis was $2.76 while the national average was $2.86. As of May 11, 2020, the national average is $1.83. In Fort Wayne, the average is $1.89. In Evansville, the average is $1.72.