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Gas prices face upward pressure from Iran nuclear deal

Staff Report • May 7, 2018 at 5:30 PM

NASHVILLE – Gas prices are stalling for now, but that trend may come to an end as uncertainty looms over the Iran nuclear deal.

Tennessee gas prices averaged $2.59 on Monday, the same as last week. Though the state average is 22 cents less than the national average, Tennessee motorists are still paying 47 cents more per gallon than this time last year, AAA reported.

“Preliminary projections had gasoline averaging around $2.75 this summer,” said Mark Jenkins, AAA spokesman, in a press release. “However, all bets are off right now, pending the president's decision on the Iranian nuclear deal. Gas prices were relatively stagnant last week, but we could see a slight boost, based on oil price gains last week and the potential for additional hikes in the coming days.”

Most expensive gas prices in the state

• Kingsport-Bristol ($2.65)

• Johnson City ($2.63)

• Jackson ($2.63)

Least expensive gas prices in the state

• Chattanooga ($2.53)

• Knoxville ($2.55)

• Clarksville-Hopkinsville ($2.56)

What about oil?

About half the price of what you pay at the pump is determined by the price of oil, according to AAA. Oil prices have reached a new 2018 high on the belief that President Donald Trump may pull out of the Iran nuclear deal.

Such a move would likely reinstate sanctions, resulting in reduced global supply and higher fuel prices, AAA reported.

President Trump has until May 12 to decide whether to extend the existing Iranian nuclear deal or restore penalties on one of the world's biggest oil producers. Restoring sanctions could eliminate 1 million barrels of Iranian oil per day, AAA reported, further constricting supplies in what is already considered to be a tight global market.

Until a decision is made, the oil market remains restless.

To view daily gas price averages, visit GasPrices.AAA.com.

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