After six weeks of falling gas prices, Chattanooga gas prices jumped by an average of 17 cents a gallon last week as winter storms around the Christmas holiday put an extra chill in motorists' pockets, according to GasBuddy's survey of 170 stations in Chattanooga.
The average price of regular gas in Chattanooga rose to an average of $2.75 a gallon at the start of this week, the first increase in weekly prices in the GasBuddy surveys since early November.
"Extremely cold weather led to many refinery issues, shutting down over a million barrels of refining capacity, pushing wholesale prices up," Patrick De Haan, head of petroleum analysis at GasBuddy, said in his weekly report on the fuel markets. "In addition, China's reopening plans gave markets inspiration that global oil demand will start to recover, as China's nearly three-year COVID-zero policies appear to be coming to an end."
De Haan said the jump at the pump will likely be temporary as most refiners get back online after cold-weather related cutbacks and outages.
"Most areas have seen the bulk of the rise already hit, but should oil continue to rally, more increases could be on the way," he said.
But the new year still begins with prices at the pump in Chattanooga 51 cents a gallon cheaper than a year ago and 53 cents a gallon below the gas prices of a decade ago, not even considering the 28.3% rise in inflation over the past 10 years. From the peak prices reached in June, gas prices fell by nearly $2 a gallon before rising just before Christmas.
According to GasBuddy price reports, gas prices in metropolitan Chattanooga were the lowest Tuesday at several stations in Chickamauga and Fort Oglethorpe, Georgia, where gas was priced at $2.49 a gallon. Georgia boasted the lowest average price for gasoline of any state in the country last week at $2.74 a gallon for regular fuel, or 43 cents a gallon below the U.S. average.
The national average price of gasoline increased by 12.3 cents per gallon in the past week to $3.17 a gallon.
For all of Tennessee, gas was the cheapest at a Kroger station in Gallatin, where regular gas was priced at just $2.29 a gallon, according to GasBuddy.com.
A separate survey of gas stations by AAA Auto Club Group showed a similar jump in fuel prices across Tennessee last week after a month and a half of decreases in pump prices.
"Temporary refinery issues caused by the winter storm in late December coupled with a brief spike in gasoline demand from those hitting the road for the holidays have caused gas prices across the state to rise," AAA spokeswoman Megan Cooper said in a news release. "Even with the recent spike in pump prices, we are still seeing prices less expensive than both a month and one year ago. It's likely that gas prices will remain volatile through this week. However, it does seem like the rate of increase in our state gas price average has slowed compared to last week."
After rallying last week as China began to reopen its economy, the oil price rebound has somewhat stalled in recent days. At the open Tuesday after the extended holiday weekend, a barrel of West Texas Intermediate crude oil was down $1.02 per barrel to $79.24, some 50 cents lower than last Tuesday's start. Brent crude oil was also in the red, down 96 cents to $84.95 per barrel, about 70 cents lower than last Tuesday.
De Haan said with the holidays now behind us, oil markets may see a bit more activity. While China's reopening is a long-term bullish factor, a short-term surge in COVID-19 cases is likely, subduing a quick recovery in oil demand, De Haan said. In addition, cold weather during the week of Christmas affected many refineries, stifling oil use for refining operations.
Contact Dave Flessner at email@example.com or 423-757-6340.