AAA: Tennessee gas prices decline through Labor Day weekend

Published 3:35 pm Tuesday, September 6, 2022

NASHVILLE — Gas prices across Tennessee are once again trending lower. The state gas price average declined nearly eight cents over last week and through the Labor Day holiday weekend. The Tennessee Gas Price average is now $3.36 which is nearly 30 cents less expensive than one month ago and 45 cents more than one year ago.

On Monday, the state average price for a gallon of regular unleaded gasoline was $3.37 per gallon. That’s 46 cents more than what drivers paid during last year’s holiday and the most expensive Labor Day pricing since 2013 when prices were at $3.38 per gallon.

“Sharp drops in the oil and gasoline futures markets last week are paving the way for cheaper pump prices,” said Megan Cooper, spokeswoman for AAA – The Auto Club Group. “The losses were fueled by growing concerns that a global recession and Covid-19 outbreaks in China would stifle global fuel demand. If these market changes are sustained, it’s likely that local pump prices will continue to decline this week.”

• 30% of Tennessee gas stations have prices below $3.25

• The lowest 10% of pump prices are $3.10 for regular unleaded

• The highest 10% of pump prices are $3.73 for regular unleaded

• Tennessee is the 7th least expensive market in the nation

Lower oil prices, modest domestic gasoline demand, and a quiet hurricane season are combining to drive pump prices lower. The national average for a gallon of gas fell seven cents in the past week to $3.77.

Meanwhile, oil prices dipped on recent lackluster Chinese manufacturing output due to lower demand for goods and new COVID19 outbreaks in critical industrial cities. This is fueling fears that oil demand could drop in China, the world’s largest importer of crude oil.

According to data from the Energy Information Administration (EIA), domestic gas demand increased slightly from 8.43 million b/d to 8.59 million b/d last week. However, the rate is nearly 1 million b/d lower than the last week of August 2021. Also, total domestic gasoline stocks decreased by 1.1 million bbl to 214.5 million bbl. Although gasoline demand rose and supply tightened, lower oil prices led to falling pump prices. If oil prices continue to decline, drivers will likely continue to see pump prices drop further.

Today’s national average of $3.77 is 31 cents less than a month ago but 59 cents more than a year ago.

At the close of Friday’s formal trading session, WTI increased by 26 cents to settle at $86.87. Crude prices increased slightly at the end of last week due to the Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, deciding to reduce production by 100,000 barrels for October. However, prices declined most of last week amid market concerns that crude demand will fall if economic growth slows or stalls due to a recession. For this week, crude prices could continue to drop if demand concerns persist. Additionally, EIA’s latest weekly report showed that total commercial crude inventories decreased by 3.4 million bbl to 418.3 million bbl.

Drivers can find current gas prices along their route using the AAA TripTik Travel planner.

• Most expensive metro markets – Morristown ($3.46), Memphis ($3.45), Jackson ($3.44)

• Least expensive metro markets – Clarksville ($3.21), Chattanooga ($3.24), Johnson City ($3.27)