After a period of declining prices, New Jersey is facing a sudden surge in gas costs, reaching levels not seen in nearly a year. According to reports from AAA and Gas Buddy petroleum analyst Patrick De Haan, the average price per gallon in the state spiked by five cents within just a day, marking a significant turnaround.
De Haan attributes this rapid increase to several factors, prominently including a recent spike in the price of oil. Over the past three weeks, oil prices have escalated by nearly 15%, climbing to $84 per barrel from lows in the low $70s not long ago. This sudden rise in oil costs has exerted direct pressure on gas prices across the board.
Moreover, geopolitical tensions in the Middle East, particularly between Israel and Hamas, have further compounded the situation. In addition, Central Banks in Europe and Canada have opted to cut rates, which, combined with a reduction in production by OPEC, has led to shrinking global inventories amidst growing demand.
The impending hurricane season has also cast a shadow over gas prices. Hurricane Beryl, the earliest-ever Category 5 hurricane, poses a potential threat to refineries in the Gulf of Mexico. Should this hurricane disrupt production infrastructure in Texas and Louisiana, gas prices could experience a rapid acceleration.
Looking ahead, De Haan predicts that gas prices could increase by an additional 5 to 10 cents per gallon in the coming weeks, contingent upon the path of Hurricane Beryl. A particularly impactful trajectory could lead to an even more substantial rise of 25 to 50 cents per gallon.
However, he anticipates a potential reversal in prices as demand typically decreases heading into the fall season. This seasonal shift is often accompanied by a switch to cheaper winter gasoline by mid-September, which historically moderates prices.
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While New Jersey residents brace for higher gas expenses in the immediate future, relief remains possible as seasonal changes and global factors continue to influence market dynamics.
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