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Tennessee gas prices drop 3 cents over past week

Tennessee motorists saw a little relief at the pump over last week as gas prices fell three cents, on average, across the state. The Tennessee Gas Price average is now $3.06 which is nine cents cheaper than one month ago and $1.16 more than one year ago.  

The average price per gallon of regular unleaded in Coffee County is $3.09 – that is 3 cents over the state average and 26 cents below the national average of $3.35. That price is also 12 cents higher than neighboring Rutherford County and 26 cents more expensive than neighboring Bedford County.

The most expensive gas in the nation can be found out west, where motorists pay $4.68 cents per gallon.

“Consumers may be catching a break at the pump right now, but it’s not for a very good reason,” said Stephanie Milani, Tennessee Public Affairs Director, AAA – The Auto Club Group. “A potential COVID-19 induced economic slowdown hurts everyone and could prompt OPEC to slash production if oil prices drop too low.”

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  • 45% of Tennessee gas stations have prices below $3.00 
  • The lowest 10% of pump prices are $2.82 for regular unleaded 
  • The highest 10% of pump prices are $3.36 for regular unleaded

National Gas Prices

Pump prices continue to tumble as fears of a possible COVID-19 global economic slowdown pushed oil prices into the mid $60s per barrel—a price not seen since August. Also helping to ease upward pricing pressure was the decision by OPEC and its oil-producing allies not to cut production. The national average for a gallon of gas dipped 4 cents on the week to $3.35. For consumers, gasoline prices were last this low on October 20.

On December 2, OPEC and its allies, a group referred to as OPEC+, announced it would stick to its plan, for now, to raise production by 400,000 b/d in January. The move was likely in response to the Biden Administration’s call to increase supply to tame high fuel prices.

According to new data from the Energy Information Administration (EIA), total domestic gasoline stocks increased by more than 4 million bbl to 215,422 million bbl last week. Meanwhile, gasoline demand dipped from 9.3 million b/d to 8.8 million b/d. The slight decrease in demand contributed to falling prices, while lower crude prices also put downward market pressure on pump prices.

Today’s national average of $3.35 is seven cents less than a month ago and $1.19 more than a year ago.

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National Oil Market Dynamics

At the close of last week’s formal trading session, WTI decreased 24 cents to settle at $66.26. Crude oil prices decreased last week due to uncertainty of the COVID-19 omicron variant’s impact on demand and the announcement that OPEC+ will ramp up production by 400,000 b/d in January. Additionally, EIA reported minimal draws on U.S. commercial crude oil inventories, which decreased by 900,000 bbl from the previous week to 433.1 million barrels. This week, crude oil prices could continue to fluctuate. Market watchers will keep a close eye on crude oil inventories and the impact that the omicron variant has on demand.

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