With concerns looming about an economic slowdown, driver demand at the gas pump has slowed. The ultimate result? Less pain at the gas pump, according to analysts.
If you’re looking to travel far, you’re in luck, as gas prices are not likely to peak beyond $4 a gallon this summer.
“What’s bad for the economy is often good for gas prices,” said Patrick De Haan, head of petroleum analysis at GasBuddy.
Economic conditions ranging from widespread tech layoffs to political standoff over the debt ceiling have translated to people tightening their budgets, especially their summer travel budgets, De Haan said.
He estimated that at most, prices could reach the high $3 range, or the low $3 range “if the economy stutters, if the federal debt ceiling is not raised.”
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This time last year, gas was pushing well past $4, with drivers having to shell out $4.47 ahead of Memorial Day weekend — the unofficial start of summer.
Now the numbers are much more forgiving, according to AAA, which pegged the statewide average at $3.42 as of Tuesday. Meanwhile, the national average was $3.53 as of Monday, compared to $4.32 a year ago.
Brent crude oil was trading at $76.88 a barrel, compared to $122 a barrel in June 2022, according to oilprice.com. New Jersey gas peaked last year at $5.05 a gallon on June 13.
"Concerns over a global economic recession have caused oil prices to trend downward, leading to lower prices at the pump,” said Tracy Noble, spokesperson for AAA Mid-Atlantic.
"We are also experiencing lower demand during the lull ahead of the upcoming summer travel season. Together, these factors are pushing pump prices lower―at least for now."
Denton Cinquegrana, an analyst with Rockville, Maryland-based Oil Price Information Service, suggested gas prices both nationally and in New Jersey wouldn’t likely hit past $4 a gallon.
“Demand I suspect will be a bit better than last year because drivers will not be dealing with $5 gasoline and that will help with their confidence,” he noted.
One wrench in this entire equation? Hurricanes.
Hurricane season officially starts on June 1, and many storm paths that plow through the Gulf of Mexico with its refinery capacity “are always worth keeping an eye on,” Cinquegrana said.
But “if we do hit the debt ceiling, the federal government shuts down, I don’t even know if a hurricane could cause the shock of getting us to $4,” De Haan cautioned.
This article originally appeared on NorthJersey.com: NJ gas prices not expected to top $4 a gallon this summer