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Heat Wave Leads To Higher Pump Prices

Posted on Wednesday, September 6, 2023 at 12:53 pm

DUANE SHERRILL
Contributor

The national average for a gallon of gas awoke from a months-long slumber, surging 13 cents since last week to $3.71. The primary cause appears to be the oil price, which has marched nearly $4 higher in the past few days to hover near $80 per barrel. As oil accounts for almost 50 percent of the cost of a gallon of gas, higher oil prices usually mean higher pump prices.
“Gas demand, meaning people fueling up, remains tepid. It’s lower now than at this time last year and in 2021,” said Andrew Gross, AAA spokesperson. “But while the heat may be keeping some folks home, it also suppresses refinery production, according to experts. Constrained supplies and a higher cost of oil are tipping the balance toward rising pump prices for now.”
According to new data from the Energy Information Administration (EIA), gas demand rose slightly from 8.86 to 8.94 million b/d last week. Meanwhile, total domestic gasoline stocks dipped from 218.4 to 217.6 million bbl. With supplies tight, if demand should spike, pump prices will follow suit.
This past week’s national average of $3.71 is 15 cents more than a month ago but 59 cents less than a year ago.
Since last Thursday, these 10 states have seen the largest increases in their averages: Indiana (+23 cents), Iowa (+20 cents), Florida (+20 cents), Ohio (+19 cents), Georgia (+19 cents), Kansas (+18 cents), Tennessee (+18 cents), Texas (+18 cents), North Carolina (+18 cents), and South Carolina (+18 cents).
The nation’s top 10 most expensive markets: California ($4.93), Washington ($4.93), Hawaii ($4.69), Oregon ($4.59), Alaska ($4.31), Nevada ($4.24), Utah ($3.94), Idaho ($3.89), Illinois ($3.95) and Colorado ($3.92).
While Tennessee gas prices are continuing to fluctuate, moving 18 cents more expensive, on average, since last Monday, the Volunteer State is amongst the lowest prices in the nation. The Tennessee Gas Price average was $3.27 this past week which was 15 cents more expensive than one month ago but 67 cents less than one year ago.
“Gas prices are still fluctuating across the state, and even though prices moved higher on the week, Tennessee still has the second cheapest state gas price average in the country,” said Megan Cooper, spokeswoman for AAA – The Auto Club Group. “Given the recent uptick in crude oil prices it will likely take a couple of weeks for pump prices to normalize across the state. Until then, drivers should expect to see additional fluctuations in pump pricing.”
At the close of Wednesday’s formal trading session, the West Texas Index (WTI) decreased by 85 cents to settle at $78.78 before rebounding Thursday morning. Due to extended repair timelines at refineries, lower refinery oil usage rates will influence how much oil prices rise. Additionally, the EIA reported that total domestic commercial crude inventories decreased by 600,000 bbl to 456.8 million bbl.