Gasoline prices have slipped in recent days, but don’t get too comfortable. Prices in the upcoming spring rally, still weeks away, may start a march toward $3 a gallon in New Jersey, one analyst said. This winter, prices are expected to fall to around $2.40 a gallon, said Tom Kloza, chief oil analyst at the Oil Price Information Service in Wall. “From there, even a measly spring rally will take us close to $3,” he said. On Wednesday, the average price for a gallon of regular was nearly $2.58, down from almost $2.59 a day earlier and from $2.62 a week ago, according to AAA figures compiled by OPIS and Wright Express. But that’s up from $2.45 a month ago and $1.65 a year ago.
Still, with higher prices, it’s hard to drive less, said one retiree.
“I am always running doing stuff for my kids and the family, so it’s just difficult to try to save on miles,” said Eugene DiSanto, a Middletown resident.
Blame a rise in the price of crude oil over the past year for rising prices, even though wholesale oil prices have been a little sluggish and dropping recently, Kloza said.
“Wall Street and the financial community like crude oil as a hedge against inflation, and they like buying crude oil futures and options,” Kloza said.
Higher prices over the past year are taking a toll, said Tracy Noble, a spokeswoman with AAA Mid-Atlantic.
“It is starting to hit people in their wallets,” Noble said. “On average, motorists are paying about $13 more to fill up their tanks then they were a year ago. It’s noticeable.”
People are resorting to “more sensible behavior,” such as consolidating trips and being conscious of speed, all which can affect gas usage, she said.
The rise in prices over the past month is an anomaly, as supplies are up and demand is down, Noble said. “Winter’s when things tend to turn around. Demand is down and supplies are up and we have gasoline prices that are rising.”
To hear that prices might rise to $3 “is not good news,” she said.
Prices should remain lower or stay even because demand is down in the midst of a rise in supplies, said Sal Risalvato, executive director of the New Jersey Gasoline, C-store, Automotive Association, a trade group of gasoline stations, repair shops and convenience stores.
“If a commodity trader gets any kind of inkling that there is going to be a closing of the gap between supply and demand and starts bidding it up, it will go up,” he said.
Kloza said he expects that prices would be “modestly softer” between Martin Luther King Day and the Olympics, which start in the middle of next month.
“We are looking at extremely low demand and looking at crummy weather and not looking at a catalyst for prices to move higher,” he said. Prices could reach $2.40 to $2.50 a gallon.
From March through May, prices will move higher, coming close to, or briefly over, $3 a gallon, Kloza added.
“It will be liking changing a toll by 10 cents, something that gets our dander up,” he said.
The rise in oil prices has benefited oil companies, but gasoline station dealers, and even refiners, are taking it on the chin, Kloza said. “Nobody is making a killing unless you are bringing crude oil to the market,” he said. APP