Gas prices in NJ continue to drop…for now
While the condition of Garden State roads remain a source of aggravation, New Jersey drivers cannot complain about the gas prices they are enjoying at the pumps.
The New Jersey average is right around $1.65 a gallon and $1.72 nationwide. Those prices are more than 30 cents below what drivers paid at this time last year.
Everybody from analysts to drivers have been bracing for the good times to end, but Jeff Pelton, GasBuddy's Senior Petroleum Analyst, does not believe we have reached that point just yet.
"I think we could see gas prices continue to drop, possibly until the end of the month," he said. "At least, two-three weeks of seeing prices continue to drop."
From there, Pelton expects the market to level off and to see uptick as refineries close for maintenance and the fuel blend begins to change.
However, until that point, New Jersey drivers may see fuel prices in the $1.30s and, possibly, $1.20s, especially at retailers with big convenience stores attached.
"They use gas a loss-leader, in order to bring into their stores where they have better merchandise margins," Pelton said. "Those are the places where you have the potential to see these super-low prices."
Still, though, the expected spring rise in prices is not projected to be significant, and will certainly put drivers way ahead of the curve versus the last few years.
"Even when they do tick up, we're still going to be looking at prices that are just so much better than we've seen in years," Pelton explained.
The main driver of the market conditions is an epic oversupply of oil around the globe. Some of those factors include strong U.S. production, the end of Iranian sanctions, and the refusal of OPEC members, like Saudia Arabia, to cut back production to support prices.
"The world is drowning in oil," Pelton said.
The U.S. Energy Information Administration today said that drivers are expected to pay an average of less than $2 a gallon this year, which would mark the first time for that trend since 2004.