So far this year, Tennessee gas prices climbed an average of 9 cents. Last week, the state average climbed 2 cents. Sunday’s state average of $2.36 was 14 cents more than a month ago and 25 cents more than the same time last year.
The most expensive gas price averages in Tennessee were in Jackson at $2.40, Nashville at $2.38 and Kingsport-Bristol at $2.37.
The least expensive gas price averages in Tennessee were in Chattanooga at $2.28, Cleveland at $2.31 and Clarksville-Hopkinsville at $2.31.
“It has been anything but a normal January for prices at the pump,” said Mark Jenkins, spokesman for AAA. “Normally, demand slips and supplies build. However, this story so far this year has been a rally in oil prices.
“Oil prices strung together three weeks of significant gains, raising the cost of producing gasoline. As a result, gas prices for the month of January have been the most expensive in four years. Fortunately, prices at the pump plateaued late last week, after the momentum for oil stalled out. While gas prices will continue to be steered by the price of oil, they will soon face additional pressure from refinery maintenance season. During the next few months, refineries will reduce output as they conduct maintenance on their equipment and switch to summer-blend gasoline. This usually leads to tighter supplies and forces gas prices higher. However, there is still lingering hope that U.S. oil production will ramp-up sooner than later, which would boost inventories and push energy prices lower.”
The Energy Information Administration forecasted a resurgence of U.S. oil production this year, in response to the recent rally oil prices. The EIA forecasted crude oil production will average 10.3 million barrels per day in 2018, which would mark the highest annual average production rate in U.S. history, surpassing the previous record of 9.6 million barrels per day set in 1970. If the forecast holds, it would be 1 million barrels per day more than last year. The EIA expects domestic production to reach 10.8 million barrels per day in 2019 and surpass 11 million barrels per day in November 2019. With output numbers like these, the U.S. would surpass Saudi Arabia and rival Russia for the world’s top producer. Saudi Arabia has produced as much as 10.5 million barrels per day, but that rate has dropped below 10 million, due to the recent OPEC production cut agreement. Last year, Russia reached a 30-year high average production rate of 10.98 barrels per day.
At the close of Friday’s formal trading session on the New York Mercantile Exchange, West Texas Intermediate crude oil dropped 58 cents to settle at $63.37 – almost a dollar less than the week before.
Nationally, the highest average price for gasoline was Sept. 8 at $2.67, and the lowest was July 5 at $2.23. In Tennessee, the highest average price was Sept. 10 at $2.60, and the lowest was July 5 at $1.99.