NASHVILLE, Tenn. (WKRN) – There is some new insight on how much you might pay at the pumps as spring and summer vacation season quickly approaches.
On Friday, Russia delivered a surprise blow to the oil market by announcing a big production cut. According to a report from the Associated Press, the country claimed it will cut oil production next month by 500,000 barrels a day after Western countries capped the price of its oil due to their actions in Ukraine.
Patrick De Haan, a chief analyst with GasBuddy, said if Russia follows through with the cut, Tennesseans may see the affects trickle down to the prices they pay at the pump.
“Overall, oil markets remain a little bit on the tight side. Oil prices are rising a little bit as one would expect them to after this announcement,” said De Haan, “We’ll have to see if Russia follows up with actions, sometimes oil producing countries like to tease the market, they like to cause a little bit of anxiety and they don’t always follow through.”
If Russia follows through will their claims, De Haan says there will be no need to panic – as the actual increases will be notable, but not significant.
“For those Americans keeping track at home, COVID caused the largest decline in oil production and the quickest decline that we’ve ever seen. The good news is that we are now producing the most amount of oil on a daily basis since April of 2020,” said De Haan, “The bad news is some of the roadblocks are still persistent. There’s just not a lot of refining capacity, and that’s going to be problematic here in the next six to twelve weeks. Refineries are going to start to do maintenance, then we’re going to start transitioning to summer blends of fuel, and that’s why gas prices between now and Memorial Day are likely to go up.”
Analysts believe prices will increase but will not rise to the record-breaking state and national averages that were seen last year.
“That could bring prices in Nashville close to maybe slightly above $4. I’m hopeful that would be kind of the line in the sand, and hopefully we don’t get there. Of course, keep in mind last year, we went well over that. In fact, the national average hit $5 a gallon. I’m pretty sure that this year, that shouldn’t happen. The worst that it could get is close to $4 in Nashville, but that’s still not a guarantee either.”
According to GasBuddy, the national average price of gasoline has fallen 7.3 cents per gallon in the last week, and is currently averaging at $3.37 a gallon.
