·
Tentative signs of recovery in the U.S. economy have recently become
more vague. The immediate effect of this backpedaling is evident
in energy markets where the cash market price for a gallon of regular
gasoline is down roughly twenty-five cents during just the last week.
Yesterday, the cash market price for a gallon of regular gasoline was
$1.79 versus the daily high of $2.04 last week and the weekly average of
$1.98. If sustained these declines likely be reflected in the retail
price for regular gasoline which last week rose slightly to an
average $2.69 per gallon of regular. That increase pulled prices up by
more than $1.00 per gallon, or by more than one-half, from the December
low to the highest level since late-October. The figures are reported by
the U.S. Department of Energy and can
be found in Haver's WEEKLY & DAILY databases.
· The tenuous nature of the recovery also is reflected in a lower price for crude oil. Crude prices dropped yesterday to $66.93 from last week's high of $71.37 and from an average $70.61 last week for a barrel of West Texas Intermediate. The speculation of weaker demand came against the backdrop of a 3.8% year-to-year rise in crude oil production during the latest four weeks. In addition, oil is plentiful as evidenced by a 13.4% y/y rise in inventories of crude oil & petroleum products. The figures on crude oil production and inventories are available in Haver's OILWKLY database.
· Finally, an earlier plateau of natural gas prices was sustained. The Monday price of $3.96 per mmbtu (-69.4% y/y) held roughly steady with last week but that price was up slightly from the earlier low of 3.56. Current prices are down by two-thirds from the high reached in early-July of $13.19/mmbtu.
· Fighting Downturns with Fiscal Policy from the Federal Reserve Bank of San Francisco is available here.