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Gas prices on the rise as oil market regains strength

Staff Report • Jan 22, 2019 at 9:30 PM

NASHVILLE — Gas prices in Tennessee rose 1 cent last week and are expected to jump 3-5 cents this week as the oil market gains strength.

The average price for gasoline in Tennessee is $2.01 per gallon, which is 7 cents more than last month and 35 cents less than this time last year, AAA reported.

Current pump prices are also 72 cents per gallon less than last year's high and 68 cents per gallon less than what Tennessee motorists paid in October, despite the expected uptick.

“Rising gas prices are not uncommon during the month of January,” said Mark Jenkins, AAA spokesman, in a press release. “Last January, pump prices jumped 10-20 cents in various markets. The reason was the same then as it is now — rising oil prices. Oil has climbed $8 so far this year, largely due to reduced OPEC output and renewed optimism for a US-China trade deal.

“If oil prices make additional gains this week, motorists could see another round of rising prices at the pump. Regardless of the upswing, AAA still expects gas prices overall to average less than last year, with the national average peaking at around $2.75 by Memorial Day.”

Most expensive gas prices in the state

• Nashville ($2.07)

• Jackson ($2.03)

• Johnson City ($2.01)

Least expensive gas prices in the state

• Chattanooga ($1.94)

• Cleveland ($1.95)

• Morristown ($1.95)

Refinery maintenance season

Additional price increases are likely in the coming weeks as refiners enter maintenance season and prepare to switch to a more-expensive-to-produce summer-blend gasoline, AAA reported.

According to the Oil Price Information Service (OPIS), two large turnarounds have commenced:

• In the Northeast, some extensive work is being performed at Philadelphia Energy Solutions’ complex on the Delaware River.

• At the Gulf Coast, ExxonMobil has started a major turnaround that may keep a 280,000-barrel-per-day crude unit out of action for 40-60 days.

OPIS reports that Gulf Coast turnaround activity is expected to peak in March with about 1 million barrels per day of equipment scheduled to be sidelined.

While the maintenance should cut demand for U.S. crude, stronger product prices could drag crude higher, according to AAA. Gasoline is a perceived beneficiary of the refining downtime.

Energy outlook

In the latest short-term energy outlook, the Energy Information Administration expects U.S. regular retail gasoline prices to follow changes to the cost of crude oil, dipping from an average of $2.73 per gallon in 2018 to $2.47 per gallon in 2019, before rising to $2.62 per gallon in 2020.

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

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