Gas Prices Leap 21 Cents

Pump prices across Tennessee saw significant increases over last week, jumping 21 cents, on average, across the state. The Tennessee Gas Price average is now $3.39 which is 11 cents more expensive than one month ago and nearly 39 cents more than one year ago.

"Last week, oil and gasoline futures were sent back to 5-week highs after OPEC and its allies announced plans to cut oil production next month by 2 million barrels per day, " said Megan Cooper, spokeswoman for AAA - The Auto Club Group. "The U.S. price of oil also rose about 17% last week. Since oil is a key ingredient in gasoline, this raises the cost of producing, buying and selling the fuel. Therefore, it's very likely that Tennesseans will see additional fluctuations at the pump over the course of this week."

Quick Facts

• 93% of Tennessee gas stations have prices below $3.50
• The lowest 10% of pump prices are $3.21 for regular unleaded
• The highest 10% of pump prices are $3.70 for regular unleaded
• Tennessee is the 9th least expensive market in the nation

National Gas Prices

OPEC+ recent announcement that the group of oil-producing nations would slash output by 2 million barrels per day led to the price of oil creeping above $90 a barrel for the first time in several weeks. A higher cost for oil usually means more expensive gasoline. Meanwhile, domestic demand increased as more drivers fueled up last week. The national average pump price for a gallon of gas rose 12 cents over the past week to hit $3.91.

According to new data from the Energy Information Administration (EIA), gas demand increased nationally from 8.83 million b/d to 9.47 million b/d last week. Total domestic gasoline stocks decreased significantly by 4.7 million bbl to 207.5 million bbl. High gasoline demand, amid tight supply, has led to higher pump prices nationwide.

Today's national average of $3.91 is 19 cents higher than a month ago and 65 cents more than a year ago.

National Oil Market Dynamics

At the close of Friday's formal trading session, WTI increased by $4.19 to settle at $92.64. Crude prices increased last week after OPEC and its allies including Russia, known as OPEC+, announced intentions to cut crude production by 2 million b/d next month. Although crude prices have surged, the pricing impact may be short-lived as demand concerns continue to weigh on the market. For this week, crude prices could reverse course if the market continues to see indicators of weakening demand due to ongoing COVID-19 lockdowns in China and a slowdown in the economy as fears of recession grow, which could see crude prices decline due to falling demand. Additionally, EIA's latest weekly report showed that total domestic crude inventories declined by 1.4 million bbl to 429.2 million bbl.

Drivers can find current gas prices along their route using the AAA TripTik Travel planner.

Tennessee Regional Prices

• Most expensive metro markets - Jackson ($3.45), Memphis ($3.45), Nashville ($3.42)
• Least expensive metro markets - Johnson City ($3.28), Kingsport-Bristol ($3.31), Chattanooga ($3.35)