Concern over global oil supplies causes spike in gas prices

Brandon Paykamian • Oct 1, 2018 at 5:31 PM

Gas prices in Tennessee climbed 5 cents last week, according to analysts from AAA and GasBuddy.

Sunday’s state average was 3 cents more than a month ago and 15 cents more than this time last year. Gas prices in Tennessee have stayed within 5 cents of their current range since early June, but prices still remain 10 cents less than this year’s high during Memorial Day weekend.

This September marked the most expensive September for gas prices in four years, with Tennessee’s pump prices averaging $2.59 per gallon — an increase of 5 cents from last year and 52 cents from 2016.

"Concerns about how sanctions against Iranian crude will impact global oil supply began to weigh on the market last week," AAA spokesman Mark Jenkins said in a Monday news release. “Crude oil prices climbed and dragged gasoline prices higher as a result. The $5-per-barrel shift in crude can signal a 25-cent hike at the pump. However, low seasonal gasoline demand and a cheaper-to-produce winter-blend gasoline may offset some of that upward pressure."

The national gas price average stood at $2.87. Tennessee’s Monday average was $2.63.

• The most expensive gas price averages in Tennessee were in Jackson ($2.67), Nashville ($2.66) and Memphis ($2.63).

• The least expensive gas price averages in Tennessee were in Chattanooga ($2.55), Clarksville-Hopkinsville ($2.57) and Johnson City ($2.57).

Patrick DeHaan, senior petroleum analyst for GasBuddy, weighed in further on how sanctions mentioned by Jenkins have played a role in maintaining higher gas prices throughout the past month.

"Overarching concern over tightening global oil supplies, in advance of U.S. trade sanctions on Iran, have helped WTI rise $2.47 a barrel in just the past week, while Brent crude oil picked up nearly $4 in value to achieve thresholds not seen since November 2014," DeHaan said in a news release.

"Looking ahead, the squeeze in global supplies will almost certainly put gasoline prices under pressure and provide a strong basis for further increases at the pumps at a time when drivers are accustomed to seeing prices soften.

“Short of producing countries suddenly finding a million spare barrels of oil over the month of October, drivers should brace for even higher prices over the next several weeks."

For more information on local, state and national gas price trends, visit www.GasBuddy.com or www.gasprices.aaa.com.

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