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Economy in Brief

Weekly Gasoline Prices Fall To Lowest Level In One Month
by Tom Moeller September 29, 2009

The pump price for regular gasoline fell last week to the lowest level since late-July. At an average $2.50 per gallon the price dropped a nickel from the prior week and may have broken out of the sideways pattern since early-June. These prices compare to the December low of $1.61. Yesterday, prices fell further. The wholesale gasoline price was down to $1.65 per gallon. Prices had reached a high in early-August of $2.03. The figures are reported by the U.S. Department of Energy and can be found in Haver's WEEKLY & DAILY databases.

During August, the consumer price index for gasoline recouped the July decline with a not seasonally adjusted 3.3% increase. Seasonally adjusted gas prices were quite firm and rose 9.1% m/m, up 40.3% YTD.

Crude oil prices have led the decline in refined product prices. Light sweet crude oil prices (WTI) fell to $68.41 per barrel, though that still was up from the December low of $32.37. Yesterday, the spot market price for light sweet crude oil fell further to $66.84 per barrel versus a daily high of $71.55 last week.

The demand for gasoline continued to improve through mid-month. The y/y rise of 1.1% was the first meaningful positive comparison since early-2007. Demand for residual fuel oil slacked off from its earlier strength and fell 5.1% y/y while distillate demand is off 13.2% y/y. Finally, oil remains plentiful as evidenced by a 16.5% y/y rise in inventories of crude oil & petroleum products. Inventories of gasoline recently have surged  and are up 19.2% versus last year. The figures on crude oil production and inventories are available in Haver's OILWKLY database.

Natural gas prices increased again last week to an average of $3.48 per mmbtu (-54.9% y/y) but they remained down by three-quarters from the high reached in early-July of last year of $13.19/mmbtu. Yesterday prices were up from last week's level at $3.54/mmbtu. 

Weekly Prices 09/28/09 09/21/09 Y/Y 2008 2007 2006
Retail Regular Gasoline ($ per Gallon, Regular) 2.50 2.55 -31.2% 3.25 2.80 2.57
Light Sweet Crude Oil, WTI  ($ per bbl.) 68.41 71.36 -37.9% 100.16 72.25 66.12
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