Gas prices are expected to continue falling ahead of the July 4 holiday weekend, the peak of the summer travel season. However, analysts warn that this decline might soon stop and prices could even rise again as summer progresses.
Patrick De Haan, a petroleum analyst at GasBuddy.com, predicts that gas prices could drop by “a nickel or a dime at most” before July 4. However, Mark Schieldrop, a spokesperson for AAA Northeast, believes that prices are unlikely to fall further, suggesting that “we might be close to the bottom for early summer prices.”
As of Monday, the average gas price in New Jersey was $3.36 per gallon, down from $3.38 a week ago and $3.51 a month ago, according to AAA.
What Happens After July 4?
Schieldrop notes that gasoline inventories in the Northeast have decreased over the past year, while demand has increased. Data from the federal Energy Information Administration supports this observation. Schieldrop warns that “strong travel over the July 4 holiday, coupled with higher oil prices and decreasing inventories, could certainly push pump prices higher.”
De Haan of GasBuddy expects gas prices to remain stable over the summer, hovering between $3.30 and $3.40 per gallon. “We are still in the summer driving season, and though demand has been soft, it’s not that soft,” De Haan said. “We’re still on more expensive summer gasoline.”
Oil prices have risen, trading at over $82 a barrel compared to $73 a barrel earlier this month, according to NASDAQ. This summer stability in gas prices, however, could be disrupted by hurricanes. A hurricane hitting Louisiana and Texas, where much of the nation’s oil refinery capacity is located, could cause prices to surge by 25 to 50 cents per gallon in just a week.
What About After the Summer?
After the summer, De Haan predicts that gas prices could fall further. The cheaper winter blend of gasoline will start being used on September 16, which, combined with a typical drop in driving after summer ends, could push prices below $3 a gallon nationwide, including in New Jersey. “We could see a couple of stations here and there dropping below $3 a gallon over the next four to six weeks,” De Haan said.