Currently, sub-$2 gasoline can now be found in 20 U.S. states, as the effects of the bear market in crude oil trickle down to motorists.
"There’s generally a multi-day lag in gas prices following the daily changes in the price of oil," Patrick DeHaan, head of petroleum analysis for GasBuddy, said Wednesday in an interview. The Great Lakes is currently the cheapest region in the country after refineries there restarted after scheduled maintenance, he added.
Will New Jersey see Sub $2.00 Gas?
According to GasBuddy, New Jersey is the 18th most expensive when it comes to gas prices, mostly due to the gas tax of 41.4 cents which is the fifth highest in the nation. So, unless the price of crude oil goes down to $40 a barrel, New Jersey is unlikely to see $2.00 gasoline prices.
Why lower gas prices are both good and bad for the US economy
According to CNN Business: Lower prices will likely save the country $125 million a day compared with what was being paid in early October, as cheaper gas provides a powerful boost to drivers filling up their tanks, but the 2014-2016 oil crash showed that plunging energy prices can have negative consequences for the modern American economy.
Ameriprise estimates that every 10-cent change in average gasoline prices over the course of a year equates to about $14 billion in consumer savings.
But there are negative side effects as well. Thanks to the shale oil boom, the energy sector now makes up a larger chunk of the national economy than it used to. When prices crash, energy companies freeze spending, causing a ripple effect on other sectors.
Hundreds of thousands of oil workers lost their jobs several years ago as crude crashed to $26 a barrel. Dozens of energy companies went bankrupt. Business spending plummeted. And energy stocks tumbled, contributing to mayhem on Wall Street.
One big risk in 2019 is the economy could feel similar pain again. US oil prices have plummeted 38% in the past three months. And President Donald Trump has rooted for them to go lower.
The United States has only become a bigger energy player since that 2014-2016 downturn. Lifted by the shale revolution, US oil output recently surpassed Russia and Saudi Arabia for the first time since 1973. Job gains in energy powerhouses (and red states) like Texas, North Dakota and Oklahoma could be reversed if prices keep plunging.
"If we continue on the path we've seen for crude oil, we'd see a lot of job losses," said Tom Kloza, global head of energy analysis at the Oil Price Information Service.
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