Oil prices hit an 18-year low amid coronavirus lockdown

With the coronavirus lockdown keeping many New York drivers off the road, they might not have noticed how cheap gas is.

The average price at downstate pumps was just $2.175 a gallon this week, state data show.

The prices are so low because much of the world — like much of the US — is in lockdown, keeping cars parked and most businesses shut down or operating at reduced capacity. Consequently, worldwide oil demand has plummeted, sending prices plunging.

Add a dispute about production levels between Saudi Arabia and Russia, and crude oil prices have dropped to a level not seen since the early 2000s.

On Saturday, that tiff promised to keep prices low for at least a while longer.

That’s because OPEC and Russia postponed what was slated as an emergency meeting to discuss cutting their oil output. The planned virtual get-together was shifted from Monday to Thursday, as Moscow and Saudi Arabia bickered over who to blame for the plunge in prices after earlier curbs on production collapsed.

The meeting delay came as President Donald Trump pushed for the Organization of the Petroleum Exporting Countries, or OPEC, which is led by the Saudis, and its allies to find a way to stabilize global oil markets.

OPEC is working on a deal to cut the world’s oil production by about 10 million barrels a day, or 10% of world supply, and hopes the US, now the world’s largest oil producer, will sign on. Trump hasn’t made a commitment yet to join the effort, at least in part because US antitrust laws prevent price-fixing.

Texas is considering regulating output for the first time in nearly 50 years.

“The first problem is that we have to cut from the current production level now, not to go back to the one before the crisis,” an OPEC source told Reuters. “The second issue is the Americans, they have to play a part.”

Other non-OPEC oil producers, including US allies Canada and Norway, have said they’re open to some cuts if there is a global agreement.

Trump, at his daily press briefing, said, “I don’t care about OPEC. I think they’re going to settle it because they’re going to destroy themselves if they don’t. I was against OPEC for years and years.”

On Friday, the International Energy Agency warned that a cut of 10 million barrels a day would not be enough to counter the huge fall in oil demand. Even with such a cut, inventories will increase in the next few months, the agency said.

With Post wires

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