Gas Prices Drift Lower in the Face of Uncertainty

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Fears of omicron-driven economic slowdown countered by news of a severe fire at major oil refinery

NASHVILLE, Tenn. — Tennessee gas prices fell another 1.5 cents this week bringing the Tennessee Gas Price average to $2.99. Prices are now one cent cheaper than last month, but still 95 cents more than this time last year.   

Across the nation, gasoline prices fluctuated over the past few days as fears of an omicron-driven economic slowdown were countered by news of a severe fire at a major oil refinery. Last Thursday, four people were injured when a fire erupted at the Exxon Mobil Corp refinery in Baytown, Texas. The plant is one of the largest refining and petrochemical facilities in the United States. If the damage forces the plant offline for long, the disruption could push gasoline prices higher. Before the fire, the national average had declined steadily. Now the decline has slowed, but the national average for a gallon of gas still fell two cents on the week to $3.28.

“We should learn more in the coming days about the extent of the damage to the refinery,” said Stephanie Milani, Tennessee Public Affairs Director, AAA– The Auto Club Group. “If it can be back up and running in a few weeks, the effect could be minimal.  But if repairs take months, consumers could begin seeing higher prices again at the pump.” 

National Gas Prices

Today’s national average of $3.28 is 11 cents less than a month ago and $1.03 more than a year ago.

National Oil Market Dynamics

At the close of last week’s formal trading session, WTI increased by $1.03 to settle at $73.79. Despite demand concerns over the omicron variant of COVID-19, crude prices increased after the EIA reported that total domestic crude stocks decreased by 4.7 million bbl last week to 423.6 million bbl. The current stock level is 15.2 percent lower than in December 2020, contributing to pressure on domestic crude prices. For this week, prices could continue to climb if EIA’s next weekly report shows another decrease in total stocks.