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NASHVILLE – Gas prices across Tennessee dropped slightly over the past week, with the statewide average falling by three cents. The current average price for a gallon of regular unleaded gas in Tennessee is $2.73, which is 11 cents cheaper than a month ago and 53 cents less than at this time last year.

“The ongoing geopolitical tensions in the Middle East are the likely cause of the increases we saw in crude oil prices over last week,” said Megan Cooper, spokeswoman for AAA – The Auto Club Group. “These higher oil prices could contribute to an uptick in pump prices over this week.”

National Gas Prices

Despite challenges both domestically and internationally, the national average for a gallon of gas fell by four cents from last week to $3.17. Hurricane Helene’s destruction did not significantly impact the gasoline supply, but it reduced demand in affected regions by damaging infrastructure and causing power outages.

Internationally, tensions between Iran and Israel have stoked fears that a potential conflict could disrupt oil shipments through the Strait of Hormuz, a crucial passage for global maritime oil transport. As a result, oil prices have been on the rise.

Data from the Energy Information Administration (EIA) indicates a drop in gas demand from 9.20 million barrels per day (b/d) last week to 8.52 million b/d. Meanwhile, domestic gasoline stocks rose from 220.1 million barrels to 221.2 million barrels, while gasoline production decreased last week, averaging 9.6 million barrels per day. With lower gasoline demand and relatively low oil prices, pump prices may continue to slide in the near term.

On Monday the national average of $3.17 per gallon is 11 cents less than one month ago and 55 cents less than one year ago.

National Oil Market Dynamics

At the close of Wednesday’s trading session, West Texas Intermediate (WTI) crude oil rose by 27 cents, settling at $70.10 per barrel. The EIA reported that crude oil inventories increased by 3.9 million barrels from the previous week. At 416.9 million barrels, U.S. crude oil inventories are about 4% below the five-year average for this time of year.

Tennessee Regional Prices

The most expensive metro markets in Tennessee are Memphis ($2.79), Jackson ($2.78), and Nashville ($2.76). Meanwhile, the least expensive markets include Chattanooga ($2.64), Cleveland ($2.64), and Clarksville ($2.65).

While Tennessee drivers have seen slight relief at the pump, the situation remains fluid as global developments could influence prices in the weeks to come.