Chattanooga gas prices fell by an average of 5.5 cents a gallon last week and are expected to continue down this week as oil prices plunge amid cutbacks in travel from the coronavirus.
The average price of regular gas in Chattanooga dropped Sunday to $2.02 a gallon, or 21.3 cents a gallon less than the same time a year ago, according to GasBuddy's daily survey of 170 local stations.
The cheapest gas in the region today is at the Murphy USA station on Little Debbie Road in Ooltewah, where the regular gas is priced at $1.86 a gallon. The nearby Mapco, BP and Circle K stations in Ooltewah at also among the lowest in Tennessee at $1.87 per gallon, GasBuddy.com said.
Chattanooga gas prices average 34 cents a gallon below the U.S. average price of $2.36 a gallon for regular gas.
But prices at the pump are likely to drop more this week as oil prices plunge amid concern a dispute among producers could lead a global economy weakened by COVID-19 to be awash in an oversupply of crude.
Brent crude, the international standard, lost $11.44, or 25.3%, to $33.83 per barrel in electronic trading this morning in London. Benchmark U.S. crude fell $10.77, or 26.1%, to $30.49.
The dramatic losses follow a 10.1% drop for U.S. oil on Friday, which was its biggest loss in more than five years. Prices are falling as Saudi Arabia, Russia and other oil-producing countries argue how much to cut production in order to prop up prices.
Demand for energy is falling as people cut back on travel. The worry is that the new coronavirus will slow economies sharply, meaning even less demand.
Stephen Innes, chief markets strategist at AxiCorp, called reports that Saudi Arabia could increase its oil production in order to gain market share in a "shock-and-awe" strategy.
Patrick DeHaan, head of petroleum analysis for GasBuddy, said motorists are likely to see continued declines in gas prices in coming days.
"Oil has now seen its value cut nearly in half after Iran tensions inflamed prices months ago and it doesn't immediately look like it will get any better," DeHaan said. "For motorists, I urge them to be in absolutely no hurry to fill up as gas prices will drop in nearly every nook and cranny of the country, from the smallest cities to the largest metros, at a time of year that prices are usually rising, we'll see anything but that. The national average came into March like a lamb and will likely be leaving as a lion, with prices roaring lower."
The Associated Press contributed to this report.
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