(Jan. 25, 2021) - After two weeks of significant increases at the pump, gas prices increased again in Tennessee, however at a much slower rate, rising only a penny over last week. The Tennessee Gas Price average is now $2.19 which is nearly 17 cents more than one month ago and nearly 10 cents less than one year ago.
“Tennessee motorist continue to see gas prices increase, but at a much slower rate than the past few weeks,” said Megan Cooper, spokeswoman, AAA - The Auto Club Group. “Part of this is due to more stable crude oil prices throughout January. If demand continues another week of substantial increases, we could see pump prices get more expensive. However, downward pressure on crude oil prices due to a rise in coronavirus infections and travel restrictions could help to keep crude prices low and limit a substantial increase in pump prices.”
National Gas Prices
According to the latest Energy Information Administration (EIA) measurement, gasoline demand jumped from 7.53 million b/d to 8.11 million b/d. Typically a significant increase in demand results in a comparable decrease in supply, ultimately translating to more expensive pump prices. Surprisingly, the recent large jump in demand had little impact on gasoline supply and minimal impact on pump prices. For the week ending January 20, gasoline supply saw a small decrease of 300,000 bbl. At 245 million bbl, supply levels lag behind last year’s reading at this time by 15 million bbl.
National Oil Market Dynamics
At the close of Friday’s formal trading session, WTI decreased by 86 cents to settle at $52.36. Crude prices declined last week following market concern that crude demand may suffer as coronavirus infections rise and travel restrictions, which are meant to curb transmission of the virus, reduce crude demand. Additionally, EIA’s latest weekly report revealed that total domestic crude inventories rose by 4.4 million bbl to 486.6 million bbl, which also put downward pressure on crude prices. For this week, crude prices may continue to drop if market concern regarding demand continues to grow.
Tennessee Regional Prices