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Economy in Brief

U.S. Petroleum Prices Remain Near High But Spot Prices Fall
by Tom Moeller April 20, 2010

The trend has been upward for the cost of regular gasoline. Last week the price for a gallon remained at the prior week's high of $2.86 which was up by 78% since the December, 2008 low. At the margin, however, there's been some shakiness. Yesterday, the spot market price for a gallon of regular gasoline fell back by ten cents from the early-April high. The figures are reported by the U.S. Department of Energy and can be found in Haver's WEEKLY & DAILY databases.

Crude oil costs have been behind the gasoline price volatility. The price for a barrel of light sweet crude (WTI) fell a modest 1.6% last week to $84.60 from $85.97 but then fell twice that percent yesterday to $81.45. Regardless, prices remain up by two-and-one half times the 2008 low

The easing of gasoline prices has had nothing to due with the trend in demand. Weekly gasoline usage has been trending higher with more temperate weather and the improved economy. It was up 1.0% last week versus one year ago and that compares with a 3.0% decline in early-February. The demand for residual fuel oil fell 1.6% and distillate demand fell 4.8% y/y. Inventories of crude oil and petroleum products were stable through much of last month and were down slightly from one year ago.

U.S. natural gas prices were up slightly last week at $4.09 per mmbtu (+15.3% y/y). Prices reached a high of $6.50 early in January. Nevertheless, prices remained nearly double the September low.

The energy price data can be found in Haver's WEEKLY database while the daily figures are in DAILY. The gasoline demand figures are in OILWKLY.

Lessons from the failure of Lehman Brothers is this morning's House testimony by Fed Chairman Ben S. Bernanke and it can be found here.

Weekly Prices 04/17/10 04/12/10 04/05/10 Y/Y 2009 2008 2007
Retail Regular Gasoline ($ per Gallon, Regular) 2.86 2.86 2.83 38.9% 2.35 3.25 2.80
Light Sweet Crude Oil, WTI  ($ per bbl.) 84.60 85.97 83.29 69.9% 61.39 100.16 72.25
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