Jersey pump prices not likely to soar, despite OPEC cuts, analyst says
OPEC meets in Vienna Wednesday, and many expect members to agree on global production cuts. But New Jersey oil market expert Tom Kloza says it won't mean much for the price at the pump.
Kloza, global head of energy analysis for the Oil Price Information Service, said more fuel-efficient vehicles have cut demand for gas. But more importantly, he said, "the world is changed because of shale oil."
Kloza said if OPEC pushes prices up too high, "let's say if they get a real tough agreement and the price goes to $50 to $60, we will break the records for shale production that was set back in the term between 2015 and 2016. It is that easy, and you can make a lot of money at $45 or $50 dollars a barrel, let alone $55 or $60."
He expects to see winter price this season in the $2 to $2.30 range, because OPEC's impact on prices is being offset by high U.S. production right now.
But Kloza warns that could be knocked on its ear by a major world event.
"The one thing that we all have to worry about, the one thing that always makes gasoline prices drop and drop precipitously ... is a recession. We have not had one since 2008, and despite all of the hope and the glory that is associated with the new regime, (the Trump administration), the odds are that we may have a recession in the next few years," he said.
He said we are close to maximum employment right now, and that means maximum driving demand. Right now, Kloza said, he believes 2017 is going to be another very cheap year, very much unlike 2010 through 2014.
|Lowest Gas Prices in New Jersey|
|New Jersey Gas Prices provided by GasBuddy.com|
Joe Cutter is the afternoon news anchor for New Jersey 101.5.