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Economy in Brief

U.S. Gasoline Prices Up Again
by Tom Moeller January 22, 2009

Regular gasoline prices moved higher last week for the third consecutive period. They rose six cents to an average $1.85 per gallon after the prior week's ten cent gain, according to the U.S. Department of Energy survey. The latest level was the highest price since late November. Yesterday, the spot market price for regular gasoline was up again to $1.20 per gallon which was its highest level since late-November.

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

Demand continued quite weak for gasoline in reaction to the economy's weakness. The U.S. Department of Energy reported that the demand for gasoline fell by 3.9% during the latest four weeks, nearly the fastest rate of decline since late-1995 (the latest four weeks versus the same four weeks in 2008). The demand for all petroleum products also fell sharply, by 4.0%. These numbers are available in Haver's OILWKLY database.

The source for that reduced demand for gasoline is the cutback in vehicle miles driven which have fallen 3.5% during the twelve months ended October. The decline of roughly this magnitude, sustained as it has been for most of last year, is unprecedented. These Department of Transportation figures are available in Haver's OGJ database.

The price for a barrel of West Texas Intermediate crude oil retraced most of the gains during the prior two weeks and fell to $36.91 per barrel. Prices reached their high of $145.66 last July. In futures trading yesterday, the one-month price for crude oil moved back up to $43.55.

Last week, prices for natural gas slipped to $5.40 per mmbtu (-35.0% y/y). The latest average price was almost 50% below natural gas prices in early-July of $13.19/mmbtu.

Understanding Monetary Policy Implementation from the Federal Reserve Bank of Richmond can be found here.

Weekly Prices 01/19/09 01/12/09 Y/Y 2008 2007 2006
Retail Regular Gasoline ($ per Gallon) 1.85 1.78 -38.8% 3.25 2.80 2.57
Light Sweet Crude Oil, WTI  ($ per bbl.) 36.91 44.51 -59.7% 100.16 72.25 66.12
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