| Lowest Gas Prices in Chattanooga |
| Chattanooga Gas Prices provided by GasBuddy.com |
Chattanooga motorists are enjoying the cheapest gas since the depths of the Great Recession more than six years ago.
The average price of gasoline in Chattanooga fell another 4.7 cents per gallon in the past week to $1.74 per gallon, according to a survey of 170 local gas outlets released Monday by GasBuddy.com. That is the lowest average price for gas this year and the lowest average for the market since early 2009.
Chattanooga gas prices are down 24 cents per gallon in the past month and remain 29 cents per gallon below the U.S. average, which also reported continuing price declines in the past month and are now just 0.7 cents per gallon within reaching the low of March 2009 in the depths of the Great Recession.
“The next 24 hours will likely see the national average drop to a new six-plus year low,” said Patrick DeHaan, GasBuddy senior petroleum analyst.
Prices at the pump should head even lower after oil prices plunged another 6 percent on Monday to as low as $37.50 a barrel – the lowest oil prices in seven years.
From its peak in June 2014 when oil hit $108 per barrel, petroleum prices have plunged by two thirds as a massive supply glut from increased production and weak demand has hammered the oil market.
“My head is spinning from the past few days of declines. Sentiment is horrible. It’s very bearish,” said Mike Wittner, global head of oil research at Societe Generale.
U.S. oil production rose from 5 million barrels a day in 2008 to an estimated 9.3 million barrels a day in 2015. That unexpected surge, coupled with OPEC’s unwillingness to cut production, left the world awash in oil and sank prices.
DeHaan said OPEC ministers last week did little to reverse the slide in petroleum prices.
“While we wait and see what that next meeting might bring, high oil production will likely continue to boost already record high oil inventories, keeping gasoline prices somewhat subdued,” he said.
Supply is outpacing demand by about 1.4 million barrels a day, according to Judith Dwarkin, chief economist at ITG Investment Research.
Meanwhile, economic growth has been slower than expected, undercutting demand for energy. China’s economy has slowed, Japan is in recession and Europe continues to struggle. The U.S. economy is growing, but more-efficient cars have blunted the need for more fuel.
Globally, “it could take well into 2017 to work off the surplus inventory,” Dwarkin said.
Cheap oil and gas is hurting energy stocks but boosting sales of bigger vehicles.
Shares of Big Oil companies like Exxon Mobil and Chevron both fell by more than 2.5 percent in trading on the New York Stock Exchange on Monday. The Dow dropped 117 points, with the energy sector its biggest drag.
But cheaper gas is encouraging many car buyers to splurge on bigger vehicles. SUV sales have jumped 45 percent since November 2012, when gas was around $3.63 a gallon.
Cheap oil also translates to lower heating bills. The average household using heating oil will spend $1,360 this year, $493 less than last winter, according to the Energy Information Administration.
In Chattanooga, a half dozen gas stations on Signal Mountain Boulevard were selling gas Monday at $1.64 per gallon – the lowest in the region, according to GasBuddy.com. Chattanooga gas prices are averaging 9 cents per gallon below the statewide average in Tennessee.
A separate gasoline price report by AAA Monday said prices at the pump have dropped 29 of the past 31 days, cutting the average price of gas nationwide by 19 cents per gallon in the past month and 65 cents per gallon below the year-ago level.
“The national average should soon fall below the $2 per gallon mark for the first time since 2009,” AAA said in a report Monday.
The Associated Press contributed to this report
Contact Dave Flessner at dflessner@timesfree press.com or at 757-6340.