Gas prices surge as winter weather wreaked havoc on Gulf Coast refinery region
NASHVILLE, Tenn., (February 22, 2021) — Tennesseans are finding the most expensive prices at the pump this week since September 2019 - up 12 cents over last week. The Tennessee Gas Price average is now $2.41 which is 21 cents more than one month ago and nearly 18 cents more than one year ago.
“Gas prices surged last week in the aftermath of forced refinery shutdowns in the Gulf Coast due to last week’s winter weather,” said Megan Cooper, spokesperson, AAA - The Auto Club Group. “Similar to the effects that we see on refineries when hurricanes hit, any reports of extended downtime or significant supply impacts could cause another round of price increases at the pump. The good news is the nearly two dozen impacted refiners are expected to restart operations this week, if they haven’t already.”
National Gas Prices
Motorists are filling-up to some of the most expensive gas prices seen in over a year. With the forced shutdown of Gulf Coast and some Mid-West refineries due to last week’s winter weather, gasoline stocks have tightened and gas prices have skyrocketed. On the week, 66% of state averages spiked by double digits (10–22 cents), driving the national average up by 13 cents to $2.63. That is the most expensive national average since October 2019.
The Energy Information Administration (EIA) reports gasoline stocks sit at 257 million bbl. Just 2 million bbl short of year-ago, stock levels are relatively healthy. That will allow ample supply to get to impacted areas. EIA’s latest demand measurement of 8.4 million b/d is the highest reported since early November of last year. However, AAA expects that number to be lower in this Wednesday’s report as last week’s winter storm took motorists off the road.
Gas prices are likely to be volatile until crude production is back to normal levels. Motorists can expect these more expensive prices to stick around, but large spikes are likely to subside.
National Oil Market Dynamics
At the close of Friday’s formal trading session, WTI decreased by $1.28 to settle at $59.24. Crude prices took a step back last week amid market concern that crude demand may not rebound as expected, but prices did push higher earlier in the week due to supply and delivery impacts from the winter storm. Crude prices were also bolstered by EIA’s latest weekly report revealing that total domestic crude inventories dropped by 7.3 million bbl, bringing the supply level to 461.8 million bbl. For this week, crude prices will likely rise if EIA’s next weekly report shows another decrease in total stocks, but price gains could be limited again if demand concerns persist.
Tennessee Regional Prices
Tennessee Gas Price Averages
(Price per gallon of regular unleaded gasoline)
About AAA - The Auto Club Group
The Auto Club Group (ACG) is the second largest AAA club in North America with more than 14 million members across 14 U.S. states, the province of Quebec and two U.S. territories. ACG and its affiliates provide members with roadside assistance, insurance products, banking and financial services, travel offerings and more. ACG belongs to the national AAA federation with more than 60 million members in the United States and Canada. AAA’s mission is to protect and advance freedom of mobility and improve traffic safety. For more information, get the AAA Mobile app, visit AAA.com, and follow us on Facebook, Twitter and LinkedIn.