After multiple weeks of significant increases at the pump, Tennessee gas prices, on average, only increased about a penny over last week. The Tennessee Gas Price average is now $2.69 which is 28 cents more than one month ago and nearly 78 cents more than one year ago.
The National Average is $2.88. In Coffee County, the average price is $2.59, which is 10 cents below the state average and 29 cents below the national average.
“A dip in demand along with a simultaneous increase in supply and refinery utilization has contributed to slower movement in gas price increases,” said Megan Cooper, spokesperson, AAA – The Auto Club Group. “This week, motorists can expect fluctuation at the pump. However, large jumps are not likely for the majority of consumers.”
· 76% of Tennessee gas stations have prices below $2.75
· The lowest 10% of pump prices are $2.48 for regular unleaded
· The highest 10% of pump prices are $2.94 for regular unleaded
· Tennessee ranks as the 12th least expensive market in the nation
National Gas Prices
After weeks of seeing almost daily increases, the national gas price average is showing signs of stability, holding steady at $2.88 for the last 5 days. Still, today’s average is the highest price since May 2019 and is more expensive on the week (+2 cents), month (+25 cents) and year (+74 cents).
In its latest weekly reports, the Energy Information Administration (EIA) shows demand decreased from 8.7 million b/d to 8.4 million b/d indicating that Americans are slowly returning to the road, likely due to more schools opening and spring break. Further, supply increased from 231.6 million bbl to 232 million bbl. While still one of the lowest levels of 2021, the increase in supply is promising especially alongside increasing refinery utilization rates, which jumped from 69% to 76%. That is just 7 percentage points away from utilization levels before February’s Texas winter storm.
Further aiding the more modest jumps at the pump in the last week is the lower price of crude oil. Crude averaged around $63/bbl, down $2/bbl from the previous week’s average of $65/bbl.
National Oil Market Dynamics
At the close of Friday’s formal trading session, WTI increased by $1.42 cents to settle at $61.42. Although the price of crude increased (Friday) after Saudi Arabia reported a drone attack on an oil facility that caused a fire but no injuries or damage, crude prices declined on the week due to market concern that demand may stumble as some countries restart coronavirus restrictions to curb growing infection rates. The decrease in crude prices was also supported by EIA reporting that total crude inventories increased by 2.4 million bbl to 500.8 million bbl. For this week, crude prices may decline further if demand concerns persist.