The Week

New Jersey drivers are experiencing the largest week over week price jump at the pump since 2008 due to the 23 cent increase in the gas tax that went into effect on November 1.  Additionally, drivers across the Mid-Atlantic region are hoping not to have a repeat of what happened a little more than a month ago as gas prices in many areas went up following a pipeline break in late September. On October 31, an explosion occurred on Line 1 of the Colonial Pipeline. Portions of Colonial's system send gasoline and other transportation fuels as far north as New York Harbor, supplying states in the Northeast.

Nationally, today’s average price for regular unleaded gasoline is $2.22 per gallon, which is unchanged from one week ago, and two cents more than the same date last year.

CURRENT AND PAST GAS PRICE AVERAGES

Regular Unleaded Gasoline (*indicates record high)

 
11/04/16
Week Ago
Year Ago
National
$2.22 $2.22
$2.20
New Jersey
$2.29
$2.04
$1.99
Trenton
$2.32
$2.06
$1.98
Cape May County
$2.26
$2.03
$1.93
Burlington
$2.25
$1.991
$1.91
Middlesex, Somerset, Hunterdon Counties
$2.30
$2.04
$1.97
Monmouth, Ocean Counties
$2.28
$2.03
$1.95
Crude Oil

$44.18 per barrel (11/4/16)

$48.70 per barrel (10/28/16)
$46.32 per barrel (11/4/15)

At the close of Friday’s formal trading session on the NYMEX, West Texas Intermediate (WTI) closed at $44.18 per barrel. Any jump in gas prices related to the pipeline disaster may be offset by tumbling crude oil prices as the global supply glut continues to cause concern. Crude oil has closed below $47 every day this week.  Late last week, OPEC officials met in Vienna to hash out the details of a potential production freeze agreement, but several hours of discussions bore no resolution. Iraq and Iran have continued to voice concerns over participating in a production cut, and as a result, negotiations have stalled. Traders will continue to closely monitor OPEC negotiations for any indication of an agreement in the days leading up to the next official meeting scheduled for November 30. 

The Weekend

“One main factor which will determine whether we see any impact on our gas prices is how quickly the pipeline is repaired, said Tracy Noble, spokesperson for AAA Mid-Atlantic. “Even if prices in the Mid-Atlantic rise, crude oil prices may stay low for a while, potentially until the election is over, balancing out prices at the pump.”

The Week Ahead

The supply chain response to the Colonial Pipeline’s current disruption may follow the response to the previous incident, with a drawdown of in-region inventories and increased reliance on alternative sources of supply such as long-distance trucking, marine shipments from the U.S. Gulf Coast, and imports. Retail gasoline prices in the affected areas are likely to increase as these alternative supply options are more costly than the pipeline transportation provided by Colonial.