How much did we drive last year? Enough to break a record for the fifth straight year in-a-row, topping 3.2 trillion miles, says the Federal Highway Administration.
That news has our friends in the oil producing nations that make-up OPEC anticipating another record year for driving, which creates a demand for gas and higher prices. So why didn’t prices go through the roof last year? Crude oil production and refineries also broke records to keep up.
That may not be the case this year. Since OPEC production cuts took effect on Jan. 1, the majority of oil producing nations have stuck to the agreement, despite predictions by experts they wouldn’t.
Drivers who got off Route 440 in Perth Amboy and rolled up to the light at Florida Grove Road and New Brunswick Avenue were greeted by one of the lowest gas prices in the state on Friday. (Larry Higgs | NJ Advance Media for NJ.com) Larry Higgs | NJ Advance Media for NJ.com
With more than 90 percent compliance with the Vienna agreement, OPEC officials hinted that could set the stage for more production cuts later this year to bring prices up.
“All countries involved remain resolute in (their) determination to achieve a higher level of conformity,” said Mohammad Sanusi Barkindo, OPEC Secretary general in a speech last week.
This is close to an uh-oh moment for drivers, which will start to become reality in mid-March. Currently, we’re enjoying stable prices, which have trickled down a few cents a gallon each week, as predicted by Tom Kloza, Oil Price Information Service global petroleum analyst.
The average price for a gallon of regular in New Jersey was $2.31 at the end of last week and the lowest discount prices ranged between $2.05 and $2.09. GasBuddy.com reported. Prices between $2.17 and $2.20 were easy to find and four gas stations on New Brunswick Avenue between Edison and Perth Amboy had an old school price war going on at $2.09 a gallon.
The reason why prices haven’t increased to the level of OPEC’s rhetoric is because driving is still in the winter doldrums and there is a lot of conventional gas, about 29 million barrels worth, to be sold off before the April switch to reformulated gas. Refineries will be gearing up for the changeover and that means March is going to be a transitional month.
Both Kloza and the federal Energy Information Administration have pegged mid-March as the time when prices will start to rise and increase into the mid-summer. Until then, enjoy some clearance sale pricing, because all that conventional formula gas has got to go.
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