CORPUS CHRISTI, Texas — The coronavirus is also having a major impact on the oil markets. China one of the world's biggest consumer of oil has seen a sharp drop in demand. But will that ripple effect be felt all the way back To the Port of Corpus Christi, one of the biggest exporters of fuel?
The plunging price for crude oil was really felt Monday on Wall Street with a massive 2,000 point drop.
Although the scare of the spread of the coronavirus played a part, it's the oil war between Saudi Arabia and Russia that is having more of an impact.
Travis Cruger with Cruger Financial Services says, "It's in everyone's best interest to increase the price of oil. Obviously no one has control of the market but the Saudi's definitely can increase or decrease production."
Amid the coronavirus a price war is playing out between Russia and Saudi Arabia. On Monday the price of oil slumped further than it ever had since 1991 and the Gulf War.
Port of Corpus Christi, CEO Sean Strawbridge says, "The Coronavirus is playing a role in this but it's also Saudi Arabia and Russia who are now attempting to buy market share. Both of those sovereignty have a much more dependency on crude and crude prices to drive their economies."
With crude oil prices at $30 a barrel, Strawbridge says, it will be difficult for producers to make money. The smaller producers will be impacted the most.
According to Strawbridge, "When you see the rapid decline as fast as it was, not only with crude prices but certainly when you look at the financial markets, treasuries are now trading at half of what they were at their lowest point during the global financial crisis. That gives us concern."
Wall Street experienced so many investors selling their stocks Monday, an automatic pause on trading was implemented to prevent a crash. despite the sharp downturn many are confident a bounce back will happen. the only question is when and by how much?
Strawbridge says, "These are commodities though and they are cyclical and we've seen such a rapid downturn it wouldn't surprise us to see a hard bounce back up to much more reasonable levels."
According to AAA the national average for the price of a gallon of gas at the pump could fall below $2.00 by the end of March. Currently in Corpus Christi gas can be found for as cheap as $1.87 a gallon.