Fuel is one of the most essential items throughout the world. It allows everything to run. Aside from electricity (which is rapidly approaching) oil is the number one resource for heating houses, moving cars, and works to further the production of power throughout the world.
Unfortunately, due to COVID-19 and the global pandemic that ensued, the world has been put at a standstill. From airlines, to restaurants, everyone closed their doors. While this was happening, production was at an all-time high.
Fuel Production Increases
Russia and Saudi Arabia went toe-to-toe prior to the events of COVID-19. Their battle consisted of who could produce the most oil. This would allow them to remove the cap that had been placed on them. The idea was to increase production at such a level, that the recurring fuel price would drop. This would encourage more people to drive and travel. The cost of fuel is a determiner of how people go about their lives.
With no cap on production, both countries had a great plan for the rest of the year. Until…
COVID-19 Locks People In Doors
Due to the rapid spread of COVID-19 across the world, many people were instructed to stay inside. This meant travel had been restricted to extremely limited use. Airlines were stuck without anyone going anywhere. Vehicles, even now, remain on the side of the road, in driveways, or in garages. With such a high supply, and low demand, many major companies have to outsource their space in order to store all of it. With such a back log of production, the cost of a barrel of crude oil has fallen to below $0. This has led to a drastic drop in fuel prices everywhere.
In some states, their high taxes have kept the price relatively high. While in many other states, prices have gone down to a time before the new millennium.