NASHVILLE, Tenn., (January 8, 2018) -- Gas prices have held relatively steady, during the first seven days of the year. Tennessee gas prices averaged $2.28 on Sunday. The state average is 2 cents more than a week ago, and is 13 cents more than this time last year.
The most expensive gas price averages in Tennessee are in Jackson ($2.33), Nashville ($2.30), and Morristown ($2.29)
The least expensive gas price averages in Tennessee are in Chattanooga ($2.20), Clarksville-Hopkinsville ($2.22), and Jonson City ($2.27)
Prices at the pump remain elevated due to strong oil prices. WTI settled above $62 a barrel last week, for the first time since December 2013, as global supply levels tighten.
The first week of the new year is historically strong for oil prices. Then the reality of low winter demand pushes them lower for the next month or two. Meanwhile, gasoline demand, measured by the EIA, has dropped significantly, contributing to a strong build in fuel availability. This phenomenon is normal this time of year, and usually leads to lower gas prices in January and February.
"Retail prices could drop 5-15 cents in the next month and a half, while supply outpaces demand," said Mark Jenkins, spokesman, AAA - The Auto Club Group. "Unfortunately, springtime is as a springboard for prices at the pump, and we may see a 40-50 cent jump by the summer. Of course, this forecast could change dramatically if there are unexpected shifts in fuel supply and/or the stock market."
Prices normally rise in the spring as demand grows and supplies tighten. Spring is one of two times a year refineries go offline to conduct maintenance on their equipment, and switch from winter to the more expensive-to-produce summer blend gasoline. Historically, gas prices rise 30-75 cents during spring maintenance season, due to the supply reduction and summer-blend switch. Since last autumn's maintenance season was interrupted by hurricanes, this spring is likely to be more active than usual for refineries, putting the price-hike on the higher end of that 30-75 cent scale.