Gas prices face upward pressure
May 7, 2018--8:04 a.m.
Georgia gas prices averaged $2.72 on Sunday.
The state average is 1-cent less than last week, and 9 cents less than the national average. However, Georgia motorists are paying 49 cents more per gallon than this time last year.
The rising price of oil may drag gas prices higher this week. Oil prices reached a new 2018 high, on the belief that President Trump may pull out of the Iran Nuclear Deal. Such a move would likely reinstate sanctions, resulting in reduced global supply, and higher fuel prices.
About half the price of what you pay at the pump is determined by the price of oil. Last week, crude rose more than a dollar, which usually equates to a 2.5 cent increase at the pump. Friday's closing price of $69.72 per barrel is the highest daily settlement since November 2014. At that time, gas prices averaged around $2.80 nationwide and in Florida, $2.72 in Georgia, and $2.59 in Tennessee - which are about the same as what motorists are paying at the pump today.
President Trump has until May 12 to decide whether to extend the existing Iranian Nuclear Deal, or restore penalties on one of the world's biggest oil producers. Restoring sanctions could eliminate 1 million barrels of Iranian oil per day, further constricting supplies in what is already considered to be a tight global market. Until a decision is made, the oil market remains restless; inching toward a $70 per barrel threshold, which hasn't been breached since November 26, 2014.
"Preliminary projections had gasoline averaging around $2.75 this summer," said Mark Jenkins, spokesman, AAA - The Auto Club Group. "However, all bets are off right now, pending the President's decision on the Iranian Nuclear Deal. Gas prices were relatively stagnant last week, but we could see a slight boost, based on oil price gains last week and the potential for additional hikes in the coming days."