Gas prices are rising, but there’s still some good news
Gas prices have been rising again recently. But one analyst still believes we will see gas prices as low as $1.50 by Christmas.
Remember recently, when gas was pricing in the $1.80-range at some Jersey stations and we were hearing the possibility of a gallon going for $1.50 by the holidays? Right now, the average for regular in the Garden State is $1.98. And the national average is $2.21 a gallon. But, fear not, analysts say.
Jeff Pelton is a Senior Analyst for the northeast for GasBuddy.com. He says the October maintenance period for refineries that took many of them offline has been extended into November.
"The refineries are not out of their turnaround period," he said.
According to Pelton, October is notoriously a maintenance period, they do a lot of planned turnaround during October. And he says the refinery week utilization numbers that came out in last Wednesday's EIA (Energy Information Administration) report were at a five-year low. Many are old and have been going full-bore all summer, and that maintenance has taken longer.
"The refineries in this country, as we know, there has not been a new one built since the mid-70s," Pelton said.
Pelton says once refineries start lighting up again, gas prices will resume their downward slide. And his Christmas prediction?
"That $1.50 - it is not, out of the ballpark," Pelton said.
He says the good news is that when they do get out of that turnaround period, they are going to start flooding the market with gasoline and we will start seeing prices fall as we have grown accustomed to these past six or seven months.
"It is going to be close, but I expect to see a nice push by Thanksgiving, and then December, full bore," he predicts. "We should see prices drop anywhere from 13 to 15 cents in December."
The trend toward lower prices is expected to be evident at the pumps by Thanksgiving.
"I think it is going to be pushing it, but $1.79, that price point is doable. It is a holiday weekend. It is a huge weekend for retailers, a lot of travel," Pelton said.
Pelton says that we still have an 80-year high for crude oil supplies. It is just a matter of getting it through those refineries.
"I think that once we get out of there, the prices at the pump are going to start falling again and we will all be happy," he said.
Joe Cutter is the afternoon news anchor for New Jersey 101.5.