Coronavirus might be good for one thing … even lower oil prices
The gas price average in New Jersey has dropped 4 cents a gallon in the past week, according to AAA. And the price in the state is 7 cents cheaper than a month ago.
Tom Kloza, global head of energy analysis for The Oil Price Information Service, says lower crude oil prices are the result right now of lower global demand. And he links that to the new coronavirus from China — and people just not traveling as much.
"The price of crude has been in a veritable free-fall since the middle of January," he said.
Oil trading closed Tuesday at less than $50 a barrel for West Texas intermediate crude for the first time in 393 days.
"This is an unprecedented situation right now with this virus. We're talking about something now in the age of social media, where the fear of it can spread much more rapidly. So we really don't know what it's going to mean in terms of inhibiting travel," Kloza said.
AAA reports that U.S. gasoline stocks are currently at an all-time high.
Robert Sinclair, spokesman for AAA Northeast said "cheaper crude and healthy stock market levels mean motorists can expect prices to continue to decline this month."
Kloza's "hunch is that things will stabilize, and we will see gasoline prices go up toward the end of the first quarter."
New Jersey's average price is $2.54, down from $2.58 a week ago, according to AAA.
According to Kloza, "people tend to focus on gasoline. But the bigger drops in prices actually occurred for jet fuel, for diesel and for heating oil. So that's where I think a lot of people are going to get some nice surprises.
Natural gas is also at its lowest price since 2016.
"So this is a year for cheap energy and certainly starting out with cheaper prices than we could have anticipated."
Joe Cutter is the senior news anchor for New Jersey 101.5