NASHVILLE — Tennessee gas prices held steady last week, with today's state average coming in at the same price as one week ago.

The state average is now $2.88, which is only a penny more than one month ago and $1 more than one year ago.

“Motorists are paying, on average, 37% more to fill up than the start of the year,” said Megan Cooper, spokeswoman for AAA — The Auto Club Group. “Prices for the rest of the month are likely to push more expensive, but if crude production increases, as forecasted, there is the possibility of seeing some relief at the pump later this summer.”

Quick facts

  • 94% of Tennessee gas stations have prices below $2.75.
  • The lowest 10% of pump prices are $2.56 for regular unleaded.
  • The highest 10% of pump prices are $3.12 for regular unleaded.

Tennessee regional prices

  • Most expensive metro markets – Johnson City ($2.93), Memphis ($2.90), Nashville ($2.89)
  • Least expensive metro markets – Chattanooga ($2.79), Cleveland ($2.83), Clarksville ($2.85)

National gas prices

At $70 per barrel, crude oil has increased to its highest price since October 2018 and is now $23-per-barrel more expensive than it was in January. Crude prices have steadily climbed this year along with optimism for the COVID-19 vaccine and the promising impact it will have for global gasoline demand.

Market analysts are keeping a close eye on global supply and demand levels. They are especially eager to see if the Organization of the Petroleum Exporting Countries (OPEC) and its allies follow through with production increases next month. This move could help put downward pressure on crude prices and, in turn, push gas prices lower expensive. However, motorists likely would not see any impact at the pump until mid-to-late July.

Today’s national gas price average is $3.08, which is 3 cents more on the week, a nickel more on the month and 98 cents more on the year. The latest increases at the pump are attributed to the steady climb in crude prices, especially as demand decreased (−670,000 barrels per day) and supply increased (+7 million barrels), according to the latest Energy Information Administration (EIA) data.

The decrease in demand was surprising as it reflects the Memorial Day holiday, which was expected to inject higher gasoline demand.

National oil market dynamics

At the close of Friday’s formal trading session, WTI increased by 62 cents to settle at $70.91. Crude prices crossed the $70 per barrel threshold last week, a point they had not seen since mid-October 2018.

They continued to increase due to optimism that vaccine rollout will continue to help crude demand recover, and after the U.S. Consumer Price Index showed that prices increased by 5% in May compared to last year − a larger increase than expected. The new report is fanning market concerns that inflation is driving prices higher.

Additionally, crude prices were bolstered by EIA’s latest report, which revealed that total domestic crude supplies decreased by 5.2 million barrels to 474 million barrels last week. For this week, crude prices could continue to rise if EIA’s report shows another inventory decline.

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