Gas prices plateaued over the weekend, after an unseasonable jump at the pump last week. Here in the 'Boro a 10-cent increase unified most discounters to $2.18--within a penny of each other.
Tennessee gas prices rose an average of 8 cents in 10 days. Some of the highest weekly hikes were in Knoxville (9 cents), Morristown (7 cents), Chattanooga (7 cents) and Cleveland (7 cents).
The state average's steady climb came to a crawl over the weekend. Tennessee gas prices averaged $2.34 on Sunday, just fractions of a penny less than the day before. The state average is 6 cents more than a week ago and 31 cents more than last year.
- The most expensive gas price averages in Tennessee are in Jackson ($2.41), Knoxville ($2.38), and Morristown ($2.37)
- The least expensive gas price averages in Tennessee are in Murfreesboro ($2.18), Chattanooga ($2.22), Clarksville-Hopkinsville ($2.26), and Cleveland ($2.27)
"Our usual autumn pump price plunge was interrupted by rising oil prices," said Mark Jenkins, spokesman, AAA - The Auto Club Group. "Fortunately, oil prices let off the throttle last week, allowing gas prices to find what appears to be solid ground. However, motorists should expect gas prices to linger at their current levels this week."
"Analysts warn that oil prices could be somewhat volatile this week, as the consolidation of power in Saudi Arabia leaves speculators questioning the impacts on global oil supply," Jenkins continued. "Fortunately, domestic oil supply and production made solid gains. If that becomes a trend, oil prices could drift lower and take gasoline prices with them."
Crude Oil Reaches 2-Year High
Crude oil futures cooled off last week, after climbing nearly $6 in two weeks. The price for a barrel of WTI hit $57.35 on Monday; the highest daily settlement since June 2015.
"Increasing crude oil prices almost always lead to higher prices at the pump," Jenkins continued. "Expensive crude makes it more costly for refineries to produce gasoline, and that price is typically passed along to the consumer. Fortunately, oil prices backed off a bit last week, which pulled the plug on the gas price hike."
What Caused the Sharp Oil Price Increase?
- Declining U.S. rig counts
- Lower domestic oil inventories
- Oil Production Cut Extension - The market responded sharply to news of OPEC's intent to extend an oil production cut agreement with Russia and other oil producing countries through all of 2018. A decision is expected during an OPEC meeting in Vienna on November 30.
- Saudi Arabia Power Consolidation - Another factor influencing the crude oil market are reports that Saudi Arabia's King may abdicate his throne to the Crown Prince. The consolidation of power by the King has led to political instability and increased tensions with Lebanon. Since Saudi Arabia is one of the largest oil producers in the world and a major player within OPEC, any political decisions that affect their oil production could have a significant impact on global crude oil supplies.
Why is Oil Declining Now?
- Rig Count Rises - Baker Hughes rig report, which showed that U.S. drillers added nine crude oil rigs since last week. The reports of increased rig count and U.S. production may be tempering expectations that an extended OPEC production agreement could rebalance the global oil glut.
- U.S. Oil Inventories Increase - This week's U.S. Energy Information Administration (EIA) data report showed a considerable build in U.S. crude oil stocks with an increase of 2.2 million bbl to reach 457.1 million bbl. Additionally, U.S. crude oil refinery activity was also up, with 89.6% refinery utilization rate.
Gas Price Tools for Reporters/Consumers
- GasPrices.AAA.com - Daily national, state, and metro gas price averages.
- AAA Mobile app - Free app that shows current prices at a gas station near you.
Highs and Lows of 2017*
- National: the highest average price for gasoline was $2.67 on September 8. The lowest was $2.23 on July 5.
- Tennessee: the highest average price was $2.60 on September 10. The lowest was $1.99 on July 5.
CURRENT AND PAST PRICE AVERAGES
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