TN gas prices rise four cents

(Feb. 1, 2021) — Tennessee gas prices rose four cents, on average, over last week, marking the fourth straight week of increases at the pump. The Tennessee Gas Price average is now $2.23 which is 19 cents more than one month ago and a penny less than one year ago.

Tennessee drivers found the lowest gas prices for the month of January since 2019. The monthly average for January was $2.15 per gallon, the most expensive month at the pump since February 2020. Last month's state average was 19 cents less than January 2020 and 15 cents more than what drivers paid in January 2019.

“Prices at the pump continue to increase due to sustained crude oil prices - despite a drop in demand and refinery utilization ,” said Megan Cooper, spokesperson, AAA - The Auto Club Group. “Prices could continue to increase over this week if crude oil pricing remains steady, however, pump price gains could be limited due to concern over new coronavirus infections and associated travel restrictions."

Quick Facts

• 52% of Tennessee gas stations have prices below $2.25
• The lowest 10% of pump prices are $2.04 for regular unleaded
• The highest 10% of pump prices are $2.46 for regular unleaded
• Tennessee remains the 10th least expensive market in the nation
• Tennessee ranks 9th in the nation's largest weekly increases

National Gas Prices

While cheaper year-over-year, the national average increased by two cents on the week and is now 17 cents more expensive than last month. The national average continued to climb this past week despite a drop in gasoline demand and refinery utilization. According to the latest Energy Information Administration (EIA) measurements, demand declined from 8.11 million b/d to 7.83 million b/d and total refinery utilization decreased from 82.5 percent to 81.7 percent over last week. These decreases led to an increase in gasoline supply of 2.4 million bbl.

Typically, these factors (decrease in demand, increase in supply) drive a decrease at the pump, but sustained crude oil prices are pushing the increase. For three weeks, crude continues to price between $52–$53/bbl, steady price points not seen since mid-February 2020. Gas prices are expected to continue to increase as crude oil prices remain at these price points.

National Oil Market Dynamics

At the close of Friday’s formal trading session, WTI decreased by 14 cents to settle at $52.20. Price gains were limited last week by ongoing market concern that crude demand may take more time than expected to recover in 2021 due to new coronavirus infections and associated travel restrictions. However, EIA’s new weekly report prompted crude price increases earlier in the week after it showed total domestic crude inventories declined by 9.9 million bbl to 476.7 million bbl, which is the largest weekly decline since late July 2020. For this week, crude prices may continue to drop if market concern regarding demand continues to grow.

Tennessee Regional Prices

• Most expensive metro markets – Nashville ($2.27), Knoxville ($2.25), Morristown ($2.24)
• Least expensive metro markets – Chattanooga ($2.13), Cleveland ($2.19), Kingsport ($2.22)