Unusual gas price drop in NJ as spring approaches
With plummeting oil prices and a weakening global economy, New Jersey is seeing a rarity: cheaper gas as spring approaches.
Analyst Tom Kloza of The Oil Price Information Service says part of it is the inability of Russia and OPEC to agree on production, and the worldwide fear of travel from new coronavirus.
The average price in New Jersey is $2.43 a gallon. The national average is $2.36.
But Kloza said we're starting to see prices below $2.
"I think with the exception of California, Hawaii and Alaska, most portions of the country are going to revisit the numbers we last saw in 2016," he said.
"I would suggest that in this period between now and, let's say, Cinco de Mayo, we're used to seeing gasoline prices go up by somewhere between 30 and 60 cents a gallon. This time, I think we're going to see the negative image, where gasoline prices may drop by that much."
Kloza says the cheaper oil (and gas) did not begin with the novel coronavirus scare.
"Even before coronavirus, global economies had slowed somewhat and we were using less fuel in the United States than we used to, whether it was diesel or gasoline. So there was a definitely a weaker economic backdrop," he said. "But the crude anger really came Friday when a catfight broke out between Saudi Arabia and Russia. And they both went back to their countries and decided to produce as much oil as they could. That combination, that trifecta, is really going to deliver something we're not used to seeing in the spring, rapidly falling prices."
However, world oil prices did rebound 10% higher Tuesday.