Gas prices in Tennessee dropped another 5 cents last week and could move even lower this week, according to AAA. Sunday's state average price of $2.12 per gallon is nearly 30 cents less than a month ago and about 10 cents less than this time last year.
Compared to last summer, drivers in Tennessee are now saving nearly $10 on a full tank of gas, AAA reported. The current state average is about 11 cents per gallon less than what motorists paid on Christmas Day 2017.
“Holiday travelers will have more jingle in their pockets after they fill up the family vehicle,” said Mark Jenkins, AAA spokesman, in a press release. “Prices are already at two-year lows for the holidays and should slip even lower in the next two weeks.
“Oil prices have been unable to gain significant upward momentum after OPEC announced plans to cut production. The price of crude declined last week and should drop again this week, because industry analysts are skeptical that OPEC's plan could rebalance what is currently an oversupplied market. If oil prices drop even further this week, that would reduce the cost of producing gasoline and allow additional price cuts at the pump."
Most expensive gas prices in the state
• Nashville ($2.22)
• Johnson City ($2.22)
• Kingsport-Bristol ($2.18)
Least expensive gas prices in the state
• Chattanooga ($1.95)
• Cleveland ($2.00)
• Knoxville ($2.05)
• Oil inventories declined 1.2 million barrels (-0.1 percent). U.S. stocks remain 7 percent above the five-year average for this time of year.
• Gasoline supplies grew nearly 1 percent and are slightly above year-ago levels.
• Domestic oil production took a small step back, yet remains about 20 percent stronger than a year ago.
• Gasoline production took a giant leap as refineries ramp up for holiday travelers. Production rates are eight percent stronger than a week ago but are on par with this time last year.
• Implied gasoline demand rose nearly 2 percent and is keeping pace with this time last year.
On the market
At the close of Friday’s formal trading session on the New York Mercantile Exchange, West Texas Intermediate crude decreased $1.38 to settle at $51.20 per barrel. Oil prices have mostly fallen as market observers continue to worry that the global crude market is oversupplied.
Although the Organization of the Petroleum Exporting Countries (OPEC) and other oil producers, including Russia, agreed more than a week ago to reduce output by 1.2 million barrels per day at the beginning of 2019, crude prices will likely remain low until the production cuts begin, AAA reported.
However, with U.S. crude production near record highs, oil analysts are increasingly skeptical of whether OPEC's production cuts would actually work, which is why oil prices declined last week.
To view daily gas price averages, visit GasPrices.AAA.com.