Price of gasoline below $1 per litre in Barrie due to Covid-19 uncertainty and fears of a price war between producers

World oil market has declined 35 per cent since Friday

The price of gasoline has fallen below $1/litre around Barrie – 95.9 cents-a-litre at one station early this morning.

This as the oil market took a 25 per cent hit in Asia when it opened this morning, after a 10 per cent decline Friday.

There are two reasons for this.

Saudi Arabia, Russia and other oil-producing countries arguing about how much to cut production in order to prop up prices and uncertainty brought on by the Covid-19 outbreak. Demand for energy is falling as people cut back on travel around the world. There is concern the virus outbreak will slow economies sharply, meaning even less demand.

In 2014, OPEC held off production cuts in order to hold onto market share in the face of a resurgent U.S. oil industry. That led oil to tumble from over $100 US a barrel to below $40 by 2015.

Experts say this drop is much more dramatic and could have a severe impact on Alberta and, in turn, the rest of the country.