After rising 6 cents in the past week, Tennessee gas prices Sunday averaged $2.14.
Last month, Tennessee gas prices averaged $2.03 per gallon; 4 cents more than the average in July 2016. Nationwide, gas prices averaged $2.27 – 6 cents more than July 2016.
The most expensive gas price averages in Tennessee were in Memphis at $2.19, Nashville at $2.15 and Knoxville at $2.14. The least expensive gas price averages in Tennessee were in Clarksville-Hopkinsville at $2.06, Chattanooga at $2.07 and Johnson City-Kingsport-Bristol at $2.08.
“Motorists are now finding gas prices that are about 25 cents more expensive than this time last year,” said Mark Jenkins, spokesman for AAA. “Although gasoline demand is keeping pace with last year’s levels, oil prices are making the biggest difference in prices at the pump. Steady declines in crude supplies have pushed oil prices about $10 per barrel higher than last year, making it more expensive to produce gasoline.”
Last week’s Energy Information Administration report showed record-high gasoline demand. In addition, crude supplies declined for the fifth consecutive week. The five-week trend gives greater confidence to investors. However, their excitement is tempered as total crude storage 70 million barrels above the five-year average. This, combined with continuously high domestic crude oil output, it is still clear the glut of crude will not disappear easily. Because of this, oil and gasoline prices are still forecast to retreat after the summer driving season draws to a close.
Crude oil prices surpassed $50 per barrel last week for the first time since May 24. During that time, gas prices were at about the same level as they were Sunday. Although pump prices could see additional upward movement in the coming weeks, any significant gains would not come without further growth in oil prices, a hurricane in the Gulf of Mexico or some sort of interruption in fuel supply.
Oil prices held relatively steady last week, hovering between $49-$51 per barrel. Supplies declined another week by 1.5 million barrels. Production rose by 20 million barrels per day reaching 9.43 million barrels per day. The average production level of the last four weeks was 10.9 percent more than the same period last year. Refineries continued running strong, turning 3.9 percent more product than the same time last year.
Futures prices declined by 3 cents last week. Wholesale spot prices increased slightly. Supplies declined by 2,500 barrels nationwide and 1,200 barrels in the Gulf Coast. Production declined by nearly 1 percent. Implied gasoline demand set a new all-time record high of 9.842 million barrels.