Gas prices dropped Monday to the lowest price in the South at four Hixson gas stations, but an industry analyst warned that the recent decline in fuel prices may be short lived.
Regular gas was selling Monday at $1.95 per gallon at four gas stations along Highway 153 — the Murphy USA, Mapco, Citgo and Exxon stations in Hixson. Gas was also priced below $2 a gallon at a half dozen other nearby stations, according to price surveys by Gasbuddy.com.
Gas is priced cheaper at some gas stations in Oklahoma, Texas and Ohio, but Hixson boasts the cheapest prices of any area in the Southeast.
"It's likely under cost by at least a few cents per gallon," said Patrick DeHaan, head of petroleum analysis for GasBuddy. "It may get slightly cheaper, but I don't expect much cheaper."
Across the Chattanooga area, average retail gasoline prices fell by 1.6 cents per gallon in the past week, averaging $2.14 per gallon at the start of this week, according to GasBuddy's daily survey of 170 gas outlets in Chattanooga. Chattanooga gas prices average 32 cents a gallon less than the U.S. average, even though prices at the pump are still 21.1 cents per gallon above where they were a year ago.
"With OPEC deciding last week to extend last year's agreement on oil production cuts, the future for gasoline prices isn't as rosy," DeHaan said. "While the short term may feature more modest price decreases is many areas, as we set our sights on the months ahead, 2018 is starting to look ominous as a result of OPEC's extension."
U.S. oil inventories are 100 million barrels lower than where they were last year, leading 2017's yearly average gas price to close out at the highest since 2014.
But on Monday, oil prices fell more than 1 percent as the market eyed signs of rising U.S. production. Brent crude futures declined by $1.28, or 2 percent, to $62.45 a barrel. U.S. West Texas Intermediate futures were down 89 cents, or 1.5 percent, at $57.47.
Brent hit a two-year high of $64.65 a month ago and has since attracted record investment by fund managers.
"Motorists should enjoy the falling prices now because it's likely that prices may again rise approaching the New Year as oil prices continue to show strength," DeHaan said.
Contact Dave Flessner at firstname.lastname@example.org or at 423-757-6340.
This story was updated Dec. 4 at 11:05 p.m. with more information.