AAA: Gas Prices Shifts Six Cents Higher

 

Gas prices across the state moved six cents higher, on average, over last week and could move more expensive due to a rise in crude oil prices over the weekend.The Tennessee Gas Price average is now $2.61 which is 10 cents more expensive than one month ago but 15 cents less than one year ago.  

Oil prices are rising largely due to growing instability in a region that is essential to global energy markets. Although the U.S. does not import oil from Iran, the country remains a major producer, supplying nations such as China and India. Any potential disruption to Iranian oil infrastructure can influence global supply expectations.

Additionally, the Strait of Hormuz, a critical chokepoint connecting the Persian Gulf to open waters, remains one of the world’s most important shipping lanes for crude. Even the possibility of reduced traffic through the strait can create ripple effects well beyond the Middle East, affecting countries regardless of how much oil they source from the region. Because oil is traded globally, a shortfall in one region can affect prices worldwide.

"AAA does not predict gas prices, and it's still too early to know how much of an impact rising crude oil prices will have on pump prices here in Tennessee," said Megan Cooper, spokeswoman for AAA - The Auto Club Group. "Rising crude oil prices typically lead to higher gas prices, so we'll be keeping a close eye on the market in the coming days." 

National Gas Prices

Spring weather may be weeks away in much of the country, but the seasonal rise in gas prices is underway. The national average for a gallon of regular gasoline went up by six cents this past week to $2.99. Refineries are beginning the process of producing summer-blend gasoline which contains pricier additives to help reduce evaporation during warmer months. Gas demand is also expected to increase next month as spring break season kicks off and more drivers take road trips. More recently, the global tensions tied to the conflict with Iran are adding increasing upward pressure on crude oil prices. 

According to new data from the Energy Information Administration (EIA), gasoline demand decreased last week from 8.74 million b/d to 8.73 million. Total domestic gasoline supply decreased from 255.8 million barrels to 254.8 million. Gasoline production decreased last week, averaging 9.2 million barrels per day. 

National Oil Market Dynamics

At the close of Wednesday’s formal trading session, WTI fell 21 cents to settle at $65.42 a barrel. The EIA reports crude oil inventories increased by 16 million barrels from the previous week. At 435.8 million barrels, U.S. crude oil inventories are about 3% below the five-year average for this time of year. 

Tennessee Regional Prices 

• Most expensive metro markets - Nashville ($2.67), Jackson ($2.64), Memphis ($2.62)
• Least expensive metro markets - Morristown ($2.50), Clarksville ($2.50), Chattanooga ($2.56)