Record Inflation
According to the U.S. Bureau of Labor Statistics (BLS), the Consumer Price Index (CPI) for all urban Consumers (CPI-U) increased another 0.8 percent in November (seasonally adjusted), after rising almost a full percent in October. Inflation in the U.S. has increased nearly 7 percent over prices from a year ago last November. It doesn't even include this month's statistics, which will be released in early January 2022.
The gasoline index increased 6.1 percent in November, and the food index increased 0.7 percent, while the "food at home" index rose 0.8 percent. The "all items index" went up 6.8 percent for the 12 month period ending in November. It is the largest 12-month increase in 39 years.
Looking at everything except food and energy, the index is only up 4.9 percent for the period. The energy index alone went up 33.3 percent and the food index went u 6.1 percent. That's a record increase in those two categories alone, as they haven't increased that much in 13 years.
Easing costs at the pump
According to AAA, Gasoline prices fluctuated over the past few days. They are believed to be the result of an oil refinery fire in Baytown, Texas overwhelming the omicron variant COVID fears. For now, it's helping decrease prices, though the Exxon Mobil refinery is one of the largest refineries in the U.S. Should the fire shut the plant down for long, the disruption could drive prices up. For now, the steady decline in gasoline prices has slowed. The national average fell two cents for a gallon of gasoline last week.
“We should learn more in the coming days about the extent of the damage to the refinery,” said Andrew Gross, AAA spokesperson. “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.”
Gasoline Price Comparisons
According to Gas Buddy, the five most expensive states to buy gasoline, on average, in the U.S. are:
- California - $4.645
- Hawaii - $4.282
- Washington - $3.841
- Nevada - $3.822
- Oregon - $3.756
Tennessee Gasoline prices
Currently, the average gasoline price in Tennessee is ranked seventh-lowest in the U.S. at $2.967 per gallon of regular. Looking at the metro areas across the "Volunteer State", the Memphis area comes in at highest, at $3.071, followed by Nashville at $3.003, the Tri-Cities at $2.995, Knoxville at $2.984, and $2.909 in the Chattanooga area.
Patrick DeHaan, head of petroleum analysis for GasBuddy, said Tennessee benefits from its ready access to fuel refineries and pipelines, including a refinery in Memphis. Though gas prices are higher than before the pandemic, DeHaan said states like Tennessee are more likely to maintain lower fuel prices than other states. Tennessee's lower state gas taxes have a lot to do with it's lower prices.
Market
Sweet Crude (West Texas Intermediate, or WTI) increased to $73.79 last week, up $1.03 per barrel. Crude oil prices increased after the U.S. Energy Information Administration (EIA) reported total domestic crude oil stocks decreased by 4.7 million barrels last week, to 423.6 million.
Stock levels are more than 15 percent lower than they were this time last year. This contributes puts pressure on domestic oil prices. Prices may climb again if the next EIA weekly report shows further depletion of WTI crude oil stocks. Much of this could revolve around the status of the Exxon-Mobil petroleum refinery that caught fire in Baytown, Texas.
The market is a supply and demand issue. Demand has decreased since the end of the Christmas travel season, yet supplies are also down from their benchmark levels.
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