Gas Prices Tumble In Bismarck Mandan
Gas prices continue to drop across North Dakota, with many locations below two dollars a gallon. Here in Bismarck Mandan we dropped from $2.19 this past weekend to $1.99 Monday afternoon at many c-stores here in town.
So, how did we get to this point with gas prices tumbling as we head into Spring? Typically this is when gas prices start to creep up. First came the coronavirus, which reduced travel and transport, meaning the economic slowdown from the virus saps demand for fuel particularly hard.
Then came the recent meeting between OPEC and nonmember countries. On the agenda: a production cut of 1.5 million barrels a day, or about 1.5% of global production. The idea was to keep prices from sagging even more as demand is expected to fall this year. Saudi Arabia, the world’s No. 2 oil producer, wanted No. 3 Russia and other nonmembers to take 500,000 barrels per day of the cuts. Since 2016, the Saudis and the Russians have worked together on production issues.
But this time the Russians balked. They refused to join new cuts, or even to extend previous production cuts that were due to expire at the end of March. And the Saudis hit back, telling customers that they were going to ramp up production and slash prices for Asian customers.
Most of the price of gasoline in the United States simply reflects the price of oil, so lower crude prices should mean lower pump prices with a lag of about six weeks.
North Dakotans may pay less at the pump than they have in several years due to the far-reaching economic effects of the coronavirus pandemic. However, low prices could spell major trouble for the state's oil industry and the local and state governments that depend on it.
So, the question is how low will it go? That remains to be seen. Some experts say prices will stay below $2 dollars a gallon for the distant future, while others are predicting BELOW a dollar a gallon if you can believe that? However, be careful what you wish for. Gas prices that low could mean our economy is in some serious trouble.