NJ gas prices up sharply in past month, but won’t go much higher
According to AAA Mid-Atlantic, the average price of a gallon of regular gasoline in New Jersey has gone up 7 cents in the past week, nearly 30 cents in a month, and is almost 40 cents more than a year ago, just before the onset of the COVID-19 pandemic and a nosedive in oil demand that sent prices to uncommonly low levels last spring and summer.
Yet Tom Kloza, global head of energy analysis for the Oil Price Information Service, said the national price may hit its peak for the year within weeks, with the OPEC-plus alliance soon to set the standard for how much crude oil is expected to be produced at the start of the second quarter.
Crude is now going for about $60 per barrel, rising from the $40s when 2021 began.
"For every dollar increase in the price of crude, you go up about 2.4 cents on gasoline," Kloza said. "So that's strictly what's happening here."
New Jersey gas prices typically run about 12 cents higher than the national average, according to Kloza, and the nationwide mark may hit $2.80 per gallon sometime this month.
Still, he said, that's way down from prices in the $3.40 range that were common between 2011 and 2014.
"People might start getting excited and thinking about a $3 average, but I don't anticipate that folks aren't going to be able to find prices below that," Kloza said.
The mid-February winter storm that brought unusually cold temperatures and shutdown-level snow to the Gulf region may haunt the U.S. for another couple of weeks until refining is fully restored, Kloza said, but he believes we are in the "late innings" of this gasoline rally.
At the same time, the impacts of the pandemic on the price of gasoline will be long-lasting no matter where you are in the country.
Kloza said that's due to increased working from home, persisting restaurant closures or restrictions, and ongoing travel bans.
"We think that gasoline demand is not going to recover to 2019 levels this year, or next year, or the year after that. It's going to be subdued," Kloza said. "We see this at the Jersey Shore all the time, but you'll see a lot more driving on weekends than weekdays. Weekdays are going to be a little bit more tolerable."
AAA's midweek update showed the current average price of a gallon of regular gas is $2.85 in New Jersey, up from $2.56 last month and $2.47 during the first week of March 2020.