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Economy in Brief

U.S. Gasoline Price Rise Stabilized
by Tom Moeller January 27, 2009

The recent rise in regular gasoline prices stabilized last week after three consecutive weeks of increase. At an average $1.84 per gallon prices about matched the prior week's level but that still was up 13 cents from the recent low, according to the U.S. Department of Energy survey. The latest level was near the highest price since late November. Yesterday, the spot market price for regular gasoline held stable with Friday's level of $1.17 per gallon which also was the average during last week.

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 3.2% during the latest four weeks. While the rate of decline remained nearly the fastest since late-1995 (the latest four weeks versus the same four weeks in 2008) it has been stable since November. The demand for all petroleum products also has been down a sharp 4.7% y/y. 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 5.3% year-to-year during the twelve months ended November. The rate of decline has been accelerating since late 2007 and it is nearly unprecedented. These Department of Transportation figures are available in Haver's OGJ database.

The price for a barrel of West Texas Intermediate crude moved back up last week to $42.18 per barrel. Prices reached their high of $145.66 last July. In futures trading yesterday, the one-month price for crude oil moved higher versus last week to $45.73 per barrel. The two month futures price was higher still at $48.49.

The price of natural gas slipped further to $4.80 per mmbtu (-39.1% y/y). The latest average price was almost 50% below natural gas prices in early-July of $13.19/mmbtu.

Bagehot on the Financial Crisis of 1825...and 2008 from the Federal Reserve Bank of St. Louis can be found here.

The Fed's Response To The Credit Crunch, also from the Federal Reserve Bank of St. Louis is available here.

Weekly Prices 01/26/09 01/19/09 Y/Y 2008 2007 2006
Retail Regular Gasoline ($ per Gallon) 1.84 1.85 -38.3% 3.25 2.80 2.57
Light Sweet Crude Oil, WTI  ($ per bbl.) 42.18 36.91 -52.8% 100.16 72.25 66.12
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