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Gas prices jump after attacks on Saudi Arabian oil facilities

Staff Report • Sep 23, 2019 at 8:00 PM

NASHVILLE — Fall has finally arrived, and with it has come rising prices at the gas pump.

Tennessee’s average gas price is $2.40 per gallon for regular unleaded, which is 13 cents more than last week, 9 cents more than a month ago and 18 cents less than one year ago, according to AAA. The national average is $2.67, which is 11 cents more than last week, 7 cents more than a month ago and 18 cents cheaper than a year ago.

Last week was the first time since early June that the national average jumped more than a nickel in just a few days. The increase was spurred by the attacks on Saudi Arabian oil facilities the weekend prior, AAA reported.

“At $2.66, the national average is a dime more expensive that last week. The good news is we are seeing downward movement with crude oil prices and stabilization at gas pumps, but Americans can expect some fluctuation through the end of the month,” said Jeanette Casselano, AAA spokesperson, in a press release. “Should Saudi’s crude production be back to full capacity shortly, the price spikes are likely to be temporary.”

Most expensive gas prices in the state

• Nashville ($2.45)

• Jackson ($2.42)

• Johnson City, Knoxville and Memphis ($2.39)

Least expensive gas prices in the state

• Chattanooga ($2.31)

• Cleveland ($2.33)

• Clarksville-Hopkinsville ($2.36)

Falling demand

In its latest report, the Energy Information Administration measured U.S. demand at 8.9 million barrels per day, which is a substantial 900,000 barrel-per-day drop from the previous week and a low reading not seen since February.

The decrease in demand amid the spike in crude oil prices could help to keep gas price fluctuations more moderate through the end of the month, according to AAA.

What about oil?

At the close of Friday’s formal trading session on the New York Mercantile Exchange, West Texas Intermediate crude decreased by four cents to settle at $58.09, AAA reported.

Oil prices increased sharply last week following news of attacks on two crude oil facilities in Saudi Arabia on Sept. 14. On Sept. 16, the first full day of trading after the attack, WTI prices experienced the largest single-day price increase since Aug. 21, 2008, and June 29, 2012, respectively, according to EIA.

On Tuesday, Saudi Aramco reported that it was producing 2 million barrels per day and that its entire output capacity will be fully restored by the end of September. Additionally, Saudi Aramco stated that crude oil exports to customers would continue by drawing on existing inventories and offering additional crude oil production from other fields.

Tanker loading estimates from third-party data sources indicate that loadings at two Saudi Arabian export facilities were restored to the pre-attack levels, based on analysis by EIA. These efforts have helped crude prices to stabilize, and they are expected to continue stabilizing this week.

In related news last week, EIA reported that total domestic crude inventories increased by 1.1 million barrels last week. They currently sit at 417.1 million barrels, which is 23 million barrels higher than this time last year.

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