As the global oil market improves, industry experts are anticipating gas prices in Wisconsin to break $2 a gallon by April.
Global oil prices have been slowly rebounding since hitting a low of around $27 a barrel in January. Now, crude is selling for around $40 a barrel.
According to Petroleum industry analyst Patrick DeHaan, of gasbuddy.com, this combined with a seasonal transition at U.S. refineries will likely push gas prices past the $2 price point in coming weeks.
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“I would say it’s something I would bet on by say, April on account of rising crude oil prices that stand about $12 a barrel higher today than they did just three or so weeks ago and on this transition that we’re beginning towards summer gasoline,” he said.
Summer blends of gas are more expensive to produce because U.S. Environmental Protection Agency guidelines require refineries to use special additives to make it burn cleaner. For refineries this transition from winter to summer blends is also a time to make repairs.
“Most of the time refineries do maintenance in between these times of season and that can contribute to higher prices as refineries really can’t utilize their entire facility as they carry out maintenance,” DeHaan said.
Gas prices in Wisconsin and across the US have hit historic lows after OPEC countries increased oil production last year creating a glut of oil on the world market. In February, OPEC countries like Saudi Arabia and Qatar along with non-member country Russia agreed to freeze production levels.
According to DeHaan, this was enough to excite oil traders.
“Just the psyche of hearing that somebody is going to do something about this is enough for the market to then believe that maybe oil supply will go down,” DeHaan said.
He said this excitement has led to the modest increase in gas prices likely to push past $2 a gallon in the coming weeks.
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