Tennessee gas prices declined 2 cents last week. Sunday’s state average of $2.39 was 9 cents less than a month ago and 34 cents more than the same time last year.
The most expensive gas price averages in Tennessee were in Johnson City at $2.42, Jackson at $2.42 and Nashville at $2.42. The least expensive gas price averages in Tennessee were in Cleveland at $2.35, Knoxville at $2.35 and Chattanooga at $2.36.
So far, gas prices averaged the highest for February in four years.
Tennessee is ninth among states with the least-expensive gas prices in the country
“Gas prices have the potential to drop 10-15 cents, based on what happened last week,” said Mark Jenkins, spokesman for AAA. “However, refinery maintenance season is fast approaching and could spoil this big break for motorists. Every year – from February to April – reduced refinery output and the switch to summer-blend gasoline normally causes gas prices to rise 30-70 cents. Additional drops in oil prices would help soften the impact maintenance season has on prices at the pump. Expect volatility at the pump as these forces collide.”
Crude oil plunged to its lowest price of the year last week, which dramatically reduced the cost of producing gasoline. Friday’s closing price of $59.20 per barrel was down $6 per barrel from the week before, and the lowest daily settlement since December.
The downturn for energy prices began on Wednesday, when the EIA’s weekly report revealed significant gains in domestic production and inventories. Domestic oil production surged to 10.25 million barrels per day – a new record for weekly production. This was the first time U.S. output exceeded 10 million barrels a day since 1970.
As crude production roared higher, U.S. crude inventories swelled by 1.9 million barrels. It was the second consecutive week of inventory gains, after declining 11 weeks in a row. At 420.3 million barrels, domestic oil supplies are 0.5 percent higher than a week ago, but remain 4 percent lower than this time last year. Regardless, the inventory growth was one of the fundamental reasons for the oil price drop.
Gasoline futures lost significant strength last week, dropping 15 cents to $1.70 Friday. Since hitting a multi-year high of $1.93 Jan. 29, futures gasoline dropped 23 cents.
Nationally, the highest average price for gasoline was Sept. 8 at $2.67. The lowest was July 5 at $2.23. In Tennessee, the highest average price was Sept. 10 at $2.60. The lowest was July 5 at $1.99.