Forget about seeing gas prices north of $3 anytime soon, and while you’re at it you can probably bet on never again seeing gas prices as low as $1.50.
GasBuddy experts say the short- and long-term outlook for U.S. and Wisconsin gas prices is positive as gas markets are beginning to settle following Hurricane Harvey and Hurricane Irma. Portage is averaging $2.42 per gallon this week, 9 cents below the state average of $2.51. Wisconsin right now ranks as the 16th-cheapest state to purchase gasoline.
“Motorists should expect to see prices go down in the next few weeks,” said Patrick DeHaan, GasBuddy’s senior petroleum analyst. Hurricane Harvey pushed up the national price by 30 to 35 cents per gallon of gas over the past two weeks, he added, but prices were already starting to fall by a few cents per gallon as of Wednesday.
At this time last year, Wisconsin gas sold between $2.10 and $2.20 per gallon. The higher average motorists see today can be attributed almost entirely to Harvey, said Dan McTeague, also an analyst for GasBuddy.
“Every day you wait, you’ll find average prices start to trend down,” McTeague said. “As long as there are no major interruptions, I can’t see how even $2.50 (per gallon) can be sustained” in Wisconsin.
“There’s room for prices to fall another 10 cents a gallon by the end of the week.”
Fear and sporadic fuel shortages related to Harvey caused prices in southern markets to climb as high as 40 cents per gallon, while fear of Irma kept those prices up. But “that fear has ended pretty quickly,” McTeague said. This week’s post-Harvey downward trend coupled with the cheaper gasoline blends sold during winter months means Wisconsin residents will likely soon see prices at the pump in the $2.30 range.
“But the hurricane season is far from over,” McTeague warned. “These two storms (Harvey and Irma) occurred very early in the season.”
In recent memory, Hurricane Harvey’s impact on gas prices in the U.S. likely ranks third or fourth on the list of major storms, McTeague estimated.
“The market handled (Harvey) better than Katrina due to stronger (gasoline) inventory.”
Hurricane Katrina, which slammed Louisiana, the Gulf Coast and the Caribbean in 2005, pushed gas prices considerably higher than Harvey and “took a lot longer to fall down,” McTeague said. Hurricane Ike in 2008 also caused higher price spikes than Harvey did.
Many U.S. and Wisconsin residents still remember when gas prices above $3 were “normal,” McTeague acknowledged, but those days appear to be long gone. Gas prices topping $3 again would likely be due to unforeseen “massive taxes,” significant geopolitical tensions or weather events.
“Demand is a little bit more robust, and the economy is stronger (compared with 2005),” McTeague said regarding the overall health of the marketplace today. “People are taking to the roads — and a lot more people are using fuel.”
President Donald Trump’s policies in the coming years will not likely impact gas prices, DeHaan said. While President Barack Obama’s policies “made it very challenging for oil companies to find oil and ship that oil,” DeHaan added, “presidents (in general) really don’t have much of a role in gas prices at all.”
In early 2016, Baraboo residents enjoyed prices as low as $1.50 a gallon, in what DeHaan described as a “perfect storm” of favorable circumstances for U.S. motorists. DeHaan and McTeague agreed that motorists seeing gas prices that low in the future is extremely unlikely.
“Nothing’s impossible, I suppose,” DeHaan qualified.
“That was when oil was $26 a barrel,” McTeague said, noting that oil today is trading at $48 a barrel. “It would take quite the economic drop in the price of crude” for gas prices to get that low again.
For Wisconsin, prices in the $2.10 to $2.30 range should be considered “normal” in today’s overall market, the experts agreed, though it’s hard to say exactly when Wisconsin will get there. GasBuddy won’t begin putting together its annual forecast for 2018 until November.
Wisconsin “could be back to $2.35 range very soon and stay there,” McTeague said. Wisconsin motorists in the winter season seeing prices as low as in the $2.10 range wouldn’t be very surprising.