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Economy in Brief

U.S. Gasoline Prices Up Again
by Tom Moeller February 3, 2009

Despite the U.S. recession and reduced demand, regular gasoline prices again moved higher last week to an average $1.89 per gallon prices. That was up from 10 cents from the January average and up 28 cents from the December low, according to the U.S. Department of Energy survey. Yesterday, the spot market price for regular gasoline fell sharply backward from Friday's level to $1.17 per gallon (where it began the month of January). Spot prices still were up, however, by 32 cents from their December low.

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 3.5% 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 is down a sharp 4.0% 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 slightly higher last week to $42.52 per barrel and it was up 10 dollars from the low reached late in December. Prices reached a high of $145.66 last July. In futures trading yesterday, the one-month price for crude oil fell versus last week to $40.08 per barrel, down sharply from one week ago.

The price of natural gas fell again, last week to $4.75 per mmbtu (-40.9% y/y). The latest average price was down roughly two-thirds from the high reached in early-July of $13.19/mmbtu.

Labor Supply Responses to Changes in Wealth and Credit from the Federal Reserve Bank of San Francisco is available here.

Weekly Prices 02/02/09 01/25/09 Y/Y 2008 2007 2006
Retail Regular Gasoline ($ per Gallon) 1.89 1.84 -36.5% 3.25 2.80 2.57
Light Sweet Crude Oil, WTI  ($ per bbl.) 42.52 42.18 -53.3% 100.16 72.25 66.12
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