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Coronavirus May Be Keeping Gas Prices Low

A child pumps gas for his father at a gas station in L.A. (Frederic J. Brown/AFP via Getty Images)
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The average cost of a gallon of regular gas in L.A. County dropped slightly today and now stands at $3.56.

Patrick DeHaan at GasBuddy says normally gas prices would be going up as we head toward the summer months. So what explains the reversal? As concerns about the coronavirus outbreak grow, the global economy is taking a hit, and that means, in part, reduced demand:

"The U.S. is the world's largest oil consumer, but China is very close in second place, and so you're talking about a major oil consumer that is curbing demand because of what's going on with the coronavirus, so that's certainly noticeable enough that it affects the price."

The spread of the coronavirus has dramatically reduced travel in places like China. Fewer plane and car trips means less demand for oil.