AAA expects this upward trend to continue in 2018 with gas prices during the first week of January marking the most expensive start to the year in four years, according to a report released Wednesday by the auto organization.
“We are seeing higher oil prices, and a lot of this has to do with more demand, which is putting more upward pressure on the gas prices,” AAA spokesperson Stephanie Milani said. “This is somewhat inflated because of supply concerns and geopolitical tensions across the world.”
On Jan. 1, Tennessee gas prices averaged $2.26 — 13 cents more than the year before. Wednesday’s state average reached $2.27, marking a 3-cent increase from last week.
As of Wednesday, gas prices in Johnson City and the surrounding area averaged $2.24 a gallon. A week ago, the average was $2.17.
The price average for 2018 is expected to be even higher than last year’s national and Tennessee averages, according to the report. Nationally, the Energy Information Administration expects national gas prices to average $2.51 in 2018, up from $2.39 in 2017, with oil prices reaching $52.77 per barrel.
Analysts say oil prices increased toward the end of 2017, which carried over into 2018. Crude oil prices remained above $60 per barrel during the last two sessions, the highest daily prices since mid-2015, according to the AAA report.
The late-year increase was partly due to pipeline supply disruptions in the North Sea and Libya, protests across Iran and the cold snap in the U.S. that increased demand for oil, but the AAA report expects the upward pressure on oil prices could stabilize soon, since the pipeline issues have recently been resolved.
Also contributing to the high 2017 average and the predicted upward trend for 2018 is the artificial cap on oil production by OPEC nations, which was initially started in 2016 as an effort to stabilize crude oil prices, according to Milani. Combined with high demand and supply concerns, this has affected gas prices throughout the nation.
“The U.S. has reached a high crude oil production level,” she said. “But those limits that OPEC and other producers have set are continuing to put upward pressure on oil prices.”
While the gas price average for 2018 could be even higher than last year’s, there could be a price decrease in the coming weeks.
"Gas prices normally decline during January and February, as gasoline demand hits the lowest levels of the year. The pump-price plunge has faced resistance from oil prices which have been trading at two-year highs. Oil analysts believe the oil market is somewhat inflated due to geopolitical tensions and supply concerns, but prices should decline soon," AAA spokesperson Mark Jenkins said in a recent press release.
In the meantime, maintenance, such as regular oil changes and monitoring tire pressure, as well as combining trips to the store with trips to and from work and cleaning your vehicle out of any extra weight, can also help save gas money.
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