Drivers beware: NJ gas prices about to skyrocket
Prices at the pump have been moving higher for weeks in New Jersey. But now that Russia has attacked Ukraine, drivers should expect a major increase by the end of the weekend.
“You’re going to see 15 cents immediately, and by immediately I mean by Sunday, it’s going to be very quick,” Tom Kloza, the global head of energy analysis for the Oil Price Information Service, said Thursday.
The average price of gas in New Jersey is $3.62 a gallon.
$4 a gallon gas in New Jersey
Kloza said we will probably see an increase in oil production in the Gulf of Mexico as well as in North Dakota, but that won’t stop the price of gas shooting up around $4 a gallon in the first two weeks of March.
“I think we reach $4 somewhere between the Ides of March and Cinco De Mayo,” said Kloza.
A possible gas increase wildcard
The situation in Ukraine could lead to new diplomatic efforts with Iran, and that might quickly open up new oil export opportunities from that nation, and help to hold the line on oil prices internationally, analysts say. But Kloza said it’s hard to predict with any certainty what is going to happen on that front.
Concerns about the Russia-Ukraine situation have caused financial markets in the U.S. to move lower for several days.
Financial markets nosedive
Ken Kamen, the president of Mercadien Asset Management, said this is understandable because the markets don’t like uncertainty and the list of unknowns is only growing. He warns, however, that the worst time to start moving assets around is during times of heightened volatility.
“Usually at times like that you’re selling things when they’re on sale or you’re making emotional decisions when you’re not thinking straight," he said.
“That’s why it’s so important to have a long-term game plan and understand markets go up and down. It’s been quite a long time and I would say by a decade or so that we’ve had a real strong correction like this.”
Keep a long-term perspective
Kamen said it’s not unusual for markets to retrace 10% and 20% during a time of crisis.
“News events tend to be short-lived and economies tend to be very resilient, so I think people should look more toward the longer term," he said.
Kloza said the price of gasoline usually starts to move higher as the weather begins warm but the situation in Ukraine has now jump-started this process.
He noted there had already been anticipated tightness in the oil market in 2022, and prices have been trending upward, but the situation in Ukraine is a wild card.
“So far there’s been no interruption in petroleum exports from Russia but we may find out there will be some embargoes," he said.
Kloza pointed out the U.S. is not dependent on oil that comes from Russia but Europe is, and the global economy is connected and interdependent.
He also noted that many states are considering gas tax holidays. So far there has been no public mention of this idea in New Jersey.