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Economy in Brief

U.S. Gasoline Prices Fall To Lowest Since March
by Tom Moeller May 25, 2010

The coming summer driving season hasn't helped U.S. gasoline prices as they've dipped from recent highs. Petroleum prices generally weakened with evidence that forward economic momentum, globally, has lost steam. Those worries lowered the pump price of regular gasoline to $2.79 last week yet prices remained up more than three-quarters since the December 2008 low. Yesterday the spot market price for a gallon of regular gasoline fell further from last week's average. The figures are reported by the U.S. Department of Energy and can be found in Haver's WEEKLY & DAILY databases.

Lower crude oil costs have very much reflected these concerns over the worldwide economic recovery. The average price for a barrel of light sweet crude (WTI) fell last week to $69.02 versus the recent high of $84.23 averaged during April. Yesterday, crude prices fell further to $66.88 per barrel.

Demand for gasoline hasn't yet much reflected the prospects for economic weakness. It rose 1.6% last week versus one year ago. That compares to a 3.0% decline in early-February. The demand for residual fuel oil rose a lesser 7.7% and distillate demand surged 9.3% y/y. That's improved from a 12.3% decline during February. Inventories of crude oil and petroleum products improved into May but still were up just a modest 0.2% from one year ago.

U.S. natural gas prices strengthened last week to an average $4.25 per mmbtu (2.9% 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.

Weekly Prices 05/24/10 05/17/10 05/10/10 y/y 2009 2008 2007
Retail Regular Gasoline ($ per Gallon, Regular) 2.79 2.86 2.91 14.4% 2.35 3.25 2.80
Light Sweet Crude Oil, WTI  ($ per bbl.) 69.02 74.97 80.22 14.1% 61.39 100.16 72.25
Natural Gas Price ($/mmbtu) 4.25 4.20 3.96 12.9% 3.95 8.88 6.97
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