Tennessee motorists paid an average of $1.69 this Memorial Day - a nearly 82 cent discount over last year’s holiday. This week’s Tennessee Gas Price average is $1.70 which is 14 cents more than one month ago and nearly 83 cents less than one year ago.
Prices for a gallon of 87 Octane gas varied from $1.59 to $1.69 in Tullahoma while the state average finally caught up to Manchester where gas was going for $1.69 a gallon at most establishments.
“Tennesseans have seen significantly cheaper-than-normal gas prices the past two months. However, those low prices – as well as crude oil prices – have been pushing more expensive” said Megan Cooper, spokesperson, AAA - The Auto Club Group. “While motorists will see pump prices continue to increase, AAA does not expect the summer average to be as expensive as last year’s season.”
79% of Tennessee gas stations have prices below $1.75
The lowest 10% of pump prices are $1.53 for regular unleaded
The highest 10% of pump prices are $2.00 for regular unleaded
Two metro areas saw a double digit increase at the pump over the last week: Memphis (11 cents) and Knoxville (11 cents)
National Gas Prices
After dropping to a low of $1.76 in April, the national gas price average is pennies away from hitting the $2/gallon mark. Today’s average is $1.96, which is eight cents higher than a week ago, 19 cents more than last month, but still a significant 87 cents cheaper than the end of May 2019.
The more expensive pump prices can be attributed to fluctuations in crude and demand. In the past week, crude oil hit its highest price point – nearly $34 per barrel – since the Administration declared the COVID-19 outbreak a national emergency and many states started implementing stay-at-home restrictions. While demand has been increasing since the end of April, it is down 28% compared to the first three weeks of May last year.
One factor that could cause a sudden spike in gas prices is the Atlantic hurricane season, which is June 1 through November 30. The National Oceanic and Atmospheric Administration predicts the 2020 season will be above-normal, potentially resulting in 13-19 named storms. An average Atlantic hurricane season typically produces 12 named storms, including 3 major hurricanes.
National Oil Market Dynamics
At the end of Friday’s formal trading session, WTI decreased by 67 cents to settle at $33.25 per barrel. Although tension between Hong Kong and China lowered prices on Friday, crude prices generally increased last week amid growing market optimism that domestic crude demand continues to rebound as more states ease stay-at-home restrictions and demand for gasoline has grown. For this week, crude prices may continue to rise if the market believes that the 9.7 million b/d production reduction agreement for May and June 2020 between the Organization of the Petroleum Exporting Countries and other major crude exporters, including Russia, is helping to rebalance the global oil market as demand remains low due to COVID-19.