·
The news that the U.S. economy, notably the consumer, is recovering from
the Winter doldrums has given further life to energy prices. Suspecting
that a more confident consumer will drive further, regular gasoline
prices last week continued their recent upturn and rose to an
average $2.44 per gallon of regular. The gains have taken prices up by
82 cents, or by one-half, from the December low to the highest level
since early-November. Yesterday, cash market prices traded higher still
at $1.80 per gallon versus $1.78 averaged last week and these were the
highest prices since last October. The figures are reported by the U.S.
Department of Energy and can
be found in Haver's WEEKLY & DAILY databases.
· A strengthening of crude oil prices has continued together with the gains in gasoline costs. Crude prices averaged $60.48 last week for a barrel of West Texas Intermediate, up from the December low of $32.37 per barrel. Yesterday, crude oil prices rose even further to $62.45. Prices reached a high of $145.66 last July. The latest increases occurred despite a 2.7% year-to-year rise in crude oil production during the latest four weeks. The figures on crude oil production are available in Haver's OILWKLY database.
· For the moment, higher
gasoline prices & economic weakness continue to lower gasoline
demand, last week by 2.7% y/y. The change in demand is measured
using the latest four weeks versus the same four weeks in 2008. Demand
for all petroleum products was down 7.6% y/y led by a 38.8% drop
in demand for residual fuel oil and a 14.9% drop in distillate demand.
In addition, the price gains have occurred despite an 11.0% rise in
inventories of crude oil & petroleum products. These numbers also
are available in Haver's OILWKLY database.
· Finally, the gains in the price of natural gas paused last week and it fell back to $3.77 per mmbtu (-66.6% y/y). The latest price was nearly the lowest since 2002 and is down by two-thirds from the high reached in early-July of $13.19/mmbtu.
· Prospects for Oil Market Stability from the International Monetary Fund can be found here.