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Economy in Brief

U.S. Gasoline Prices Fell to Lowest Since April, Demand Growth Lowest Since 1997
by Tom Moeller October 7, 2008

For a gallon of regular gasoline, the retail price fell by a nickel last week to the lowest level since mid-April. According to the U.S. Department of Energy survey, at an average of $3.48 per gallon gasoline prices are down 63 cents since their peak in early July, or by 15.3%. Despite the recent decline, prices remained up by more than one quarter from the year ago level of $3.00. The latest decline was accompanied by a drop in the average price for all grades of gasoline to $3.54 per gallon.

Versus Friday, the spot market price for a gallon of regular gasoline plunged another twenty cents per gallon to $2.12. The drop lowered prices to their lowest since October of last year. In futures trading the November contract closed even lower at $2.06 per gallon.

Weekly gasoline prices can be found in Haver's WEEKLY database. Daily prices are in the DAILY database.

According to the U.S. Department of Energy, the demand for gasoline fell 1.9% during the last four weeks. That was the largest weekly decline since early 2005 and continued to reflect a drop off in seasonal driving. The weakness in gasoline demand goes beyond that. It was down 4.1% y/y, the largest y/y decline since early 1997.

The DOE figures are available in Haver's OILWKLY database.

The price for a barrel of West Texas Intermediate crude oil reversed the prior week's gain and fell to an average $98.58 per barrel, down from the high in July of $145.66. WTI crude prices yesterday were quite weak and they fell to $87.82 /bbl.

Yesterday, the two-month futures price for crude oil fell to $86.71 per barrel.

Last week, prices for natural gas fell to an average $7.30 per mmbtu (+8.1% y/y). Prices fell further yesterday to $7.14/mmbtu. The high for natural gas prices was in early July at $13.19/mmbtu.

Subprime Outcomes: Risky Mortgages, Homeownership Experiences and Foreclosures from the Federal Reserve Bank of Boston is available here.

Weekly Prices 10/06/08 09/29/08 Y/Y 2007 2006 2005
Retail Regular Gasoline ($ per Gallon) 3.48 3.63 25.8% 2.80 2.57 2.27
Light Sweet Crude Oil, WTI  ($ per bbl.) 98.68 110.09 20.0% 72.25 66.12 56.60
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