Gas on its way to $4 per gallon — when could it happen in NJ?
In recent months, New Jersey gas prices have trended as high as 10 cents more per gallon than the national average, which is causing one analyst who predicts the United States could be paying $4 per gallon by Memorial Day to accelerate his forecast for the Garden State.
Patrick De Haan, head of petroleum analysis for GasBuddy, said New Jersey is at "elevated risk" for hitting this holiday benchmark a little early.
There's much more to look at than just supply and demand, De Haan said, starting with refineries switching back to more expensive, summer formula gas during the spring.
"On average over the last decade or so, gas prices have increased between 25 to as much as 75 cents a gallon between the start of the year and Memorial Day Weekend," he said.
When the COVID-19 pandemic began nearly two years ago, Americans stayed home in droves, sending first demand, then oil prices, then finally oil production, plummeting.
De Haan said ever since then, uncertainty has clouded the picture of where gas prices might go next.
"The whole pandemic has really upended the factors that go into what you pay at the pump," De Haan said. "There's been a huge imbalance created by COVID-19 between supply and demand, and that's largely why we are paying a higher price."
But, he said, there is a silver lining. As prices creep up, so will production, which will eventually send prices back down again.
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There might be a time gap in that relationship, seemingly making it slow to develop, but De Haan thinks that by the end of 2022, gas prices in New Jersey might return to right about where they are right now.
"I think we eventually will see relief," he said. "Oil's a very boom-bust cycle; when prices are low, oil companies are less incentivized to produce oil and various products."
Until that relief comes, however, De Haan suggests shopping around if you can.
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