After five years of gas prices fluctuating between $3 and $4 per gallon, many people thought they would never see gas prices below $2 per gallon. Those doubters woke up to a pleasant surprise Wednesday morning.
For the first time since 2009, gas prices have fallen under $2 per gallon. As it stands in most places around the county, gas is sitting at a cool $1.99 per gallon.
The local BP gas station on Superior street has been at $1.99 per gallon since Tuesday night.
“It’s great for the customers,” assistant BP manager Shelly Brown said. “It’s nice to see.”
This particular BP saw an immediate increase in customers on Tuesday with its double coupon offer.
“Customers can save 8 cents per gallon on Tuesdays,” Brown said. “With the price falling, it was very busy here Tuesday night.”
Just two years ago at this time gas was averaging $3.25 per gallon in northern Wisconsin. Fast forward just 24 months and gas is now averaging $1.95 per gallon in northern Wisconsin.
Even in the summer of 2014 gas prices were steady in the $3.50 to $3.60 per gallon range.
So, what has changed?
There are a number of reasons why it is projected that the gas prices will only continue to fall in the United States.
First, there is more oil available now more than ever. New drilling in the Gulf of Mexico and new techniques in getting oil, such as franking, have lead to stockpiles of crude oil. American oil refineries are also not buying as much foreign barrels, as they tend to be significantly more expensive than domestic barrels.
Second, in 2013 the average price for a barrel of crude oil was near $100 per barrel. The United States Energy Administration says the average price for crude oil could drop to $62 per barrel in 2015. Gas prices often mirror what the average price per barrel is, so as the average price per barrel of crude oil drops, gas prices follow.
Third, natural disasters play a huge role in the average prices per barrel. During a time of emergency crews are not able to drill for oil. Particularly in the United States, there hasn’t been a national emergency, for example a hurricane, tornado, or flood in quite some time. Consequently, crews are able to work on a daily basis and keep the country stocked with oil.
Lastly, there are many different recipes for gasoline. There are different recipes for the different seasons. This is part of the reason why gasoline tends to more expensive in the summer, its more expensive to make a summer gasoline. On the flip side, gasoline made for winter is the cheapest because at the end of fall is usually when government standards on the process of how gasoline is made become more lax. This in turn allows oil companies to make gasoline with less hydrocarbons, driving down the cost of making gasoline.
It appears that gas prices will only continue to drop, and are projected to while winter is still around. However, expect them to begin to rise near spring and summer time as the new batches of gasoline hit the consumers.