The average price of regular gas in Chattanooga dropped 10.5 cents per gallon in the past week to $1.91 a gallon, according to GasBuddy's daily survey of 170 stations. Gas prices in Chattanooga are 33.5 cents per gallon lower than a year ago and at the lowest mid-March levels in four years.
Chattanooga area gas was the cheapest Monday in Ooltewah with regular gas selling at a Racetrack station on Lee Highway for only $1.72 a gallon. But the cheapest gas in Tennessee was in Memphis where one BP station is selling regular gas today at $1.54 per gallon.
"Gas prices are plummeting in every town, city and state with the national average seeing one of its biggest weekly declines in the last decade," said Patrick DeHaan, head of petroleum analysis for GasBuddy. "The root cause continues to be coronavirus related, since demand for oil slumped globally, inducing the current price war between Russia and Saudi Arabia as they both raise output, causing oil prices to crash through the floor."
The national average price of gasoline has fallen 14.3 cents per gallon in the last week to $2.22 per gallon. The national average is down 21.2 cents per gallon from a month ago and stands 32.9 cents per gallon lower than a year ago.
"Such a large decline (in gas prices) at this time of year is mind-blowing, as gas prices have risen in all but one year in the last 10 during the spring," DeHaan said. "All good things may not last forever, however, as rumors swirl that Russia and Saudi Arabia are holding high level talks talks to reign in the collapse in oil prices, which could eventually end the party at the pump."
Demand for jet fuel, gasoline and diesel is falling as a result of global action to limit the spread of coronavirus with gasoline futures reaching their weakest level since at least 2005.
Oil prices slid nearly 10% on Monday with U.S. West Texas Intermediate crude dripping to $28.70 per barrel.
"The demand drop unfolding is like nothing anyone has ever witnessed," Simmons Energy analyst Pearce Hammond said in a note to clients Sunday.
The unfolding price war between oil production giants Russia and Saudi Arabia and growing concern over a potential demand shock from the global coronavirus pandemic have hammered oil prices and pushed down oil prices more than 50% so far this year. That could mean gas prices may fall even more in coming weeks.
"Oil prices remain in free fall," analysts for the German bank Commerzbank wrote in a report cited by Bloomberg news. "The more countries "freeze" public life, close their borders and cancel flights, the greater the impact will be on oil demand."
Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.