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Economy in Brief

U.S. Petroleum Prices Rise
by Tom Moeller  April 5, 2011

The firming U.S. economy and political unrest in Libya gave further strength last week to petroleum prices.The pump price for regular gasoline jumped eight cents to $3.68 per gallon, the highest level since September, 2008 and more-than-double the December, 2008 low of $1.61. Typically, pump prices decline this time of year due to lessened seasonal demand. To account for this pattern, Haver Analytics calculates seasonal factors. The adjusted gasoline price rose further last week to $3.67 per gallon. Yesterday, the spot market price for a gallon of regular gasoline increased to $3.09 from an average $2.97 last week.

Crude oil prices remained strong last week and increased to $105.54 for a barrel of WTI, also the highest since September, 2008. The price compares to the 2008 low of $32.37. Yesterday prices rose further to $108.47 per barrel. Brent crude oil prices also increased, last week to $115.29 and yesterday to 119.64.

Higher prices certainly can affect demand. Gasoline demand slipped 0.1% in the latest week versus last year. The demand for residual fuel oil, used for heating, fell 4.6% but distillate demand rose 4.4% y/y. Inventories of crude oil and petroleum products remained little-changed year-to-year, though that compares to 10.0% growth in the middle of 2009.

Finally, natural gas prices rose w/w to $4.29 per mmbtu, the highest level since early-last month. Yesterday, prices slipped to $4.23 and remained down from last year's early-January high of $6.50.

The energy price data are reported by the U.S. Department of Energy and can be found in Haver's WEEKLY database. The daily figures are in DAILY and the gasoline demand figures are in OILWKLY.

Inflation Dynamics and the New Keynesian Phillips Curve from the Federal Reserve Bank of Philadelphia is available here.

Weekly Price 4/4/11 3/28/11 3/21/11 Y/Y% 2010 2009 2008
Retail Regular Gasoline ($ per Gallon, Regular) 3.68 3.60 3.56  30.4 2.78 2.35 3.25
Light Sweet Crude Oil, WTI ($ per bbl.) 105.54 104.52 99.77 26.7 79.51 61.39 100.16
Natural Gas ($/mmbtu) 4.29 4.14 3.87 13.0 4.40 3.95 8.88
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