All signs point to a continued glut of crude oil on world markets, at least through early 2017.

Svetl. Tebenkova, ThinkStock

The International Energy Agency said this week that "extraordinary volatility" in world oil markets makes forecasting extremely difficult. The IEA had been on record as recently as a year ago forecasting a "relatively swift" recovery for crude prices.

On Tuesday, oil giant Saudi Arabia refused to cut production to boost prices. The country's oil minister was quoted as saying the market should be allowed to work, even if that forces some operators out of business.

Discoveries of vast crude deposits in recent years in the U.S. from shale oil have sharply ramped up domestic crude production. More recently, the dropping of sanctions against Iran meant that they are adding about 500,000 barrels of crude oil to the daily world supply.

"You can expect, for the next couple of years, a really incredible glut of oil," said Jeff Pelton, senior petroleum analyst with gasbuddy.com.

How incredible? He said we had an 86-year high at the crude oil level last week.

"These numbers are insane with the amount of crude oil," Pelton said.

He said drivers will notice price hikes at the gas pumps in the near future, as refineries do maintenance and switch over to a summer gas formula in New Jersey.

"The demand will definitely be impacted by the refinery turnaround. And that is going to happen -- March, April," he said.

How much will that impact the gas price change? According to Pelton, New Jerseyans will see prices "stall out" and increase, but probably not as significantly as in the past -- anywhere from 10 to 20 cents locally.

In addition, he said prices will rise a little bit more in other places outside of New Jersey, 15 to 30 cents in other markets.

As far as price drops are concerned, Pelton said the high water mark for gas prices will come at the end of May or early June. Then in July and August, toward the end of the summer, we will start to see prices going down with what Pelton describes as a "pretty nice" drop, about 20 cents per month.

"I think that you will see a similar thing this year," he said.

Overall, Pelton says gas prices will remain much lower this year versus last year, even with the spring/summer "bump."

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New Jersey Gas Prices provided by GasBuddy.com

 

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