The coronavirus outbreak was classified a pandemic by the World Health Organization (WHO) sending markets and fuel prices plunging. To make matter worse, the OPEC+ group could not agree on production cuts. Saudi Arabia and Russia went their separate ways, with the intent of sending more oil into an oversupplied market.
For petroleum companies with a lot of fuel in the ground, this adds more bad news to an already poor situation. Along with crude prices in the red for the third week in a row, fuel consumption will likely continue to drop as people travel far less.
While many predict bleak fuel sales due to travel bans, event cancellations, and increased telecommuting, a silver lining does exist. Online shopping is already ramping up as shoppers try to minimize human contact as well as purchase items that have sold out at brick and mortar stores. Retailers are seeing a surge in online shopping, so there will be increased fuel demand for delivery fleets.
However, as countries lock down to combat the rapid spread of the disease, it disrupts, if not altogether shuts down the supply chain. How U.S. retailers handle supply shortages and workforce shortages will greatly affect their success through this challenging time. Fuel marketers will need to stay fluid as markets and business rise and fall throughout.