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Economy in Brief

U.S. Gasoline Price Falls While Demand Collapses
by Tom Moeller  November 8, 2011

Divergent movement underscores recent trends in energy prices. The pump price for regular gasoline fell three cents last week to $3.42 per gallon. Prices remained down versus May when they averaged $3.91. Retail prices usually start to ease this time of year with reduced seasonal demand. To account for this pattern, Haver Analytics calculates seasonal factors. As a result, the adjusted gasoline price ticked up to $3.59 per gallon, up eighteen cents in the last four weeks. Yesterday, the wholesale price for a gallon of unleaded rose to $2.78, up eight cents from last week's average.

Gasoline demand fell a sharp 4.0% on average during the last four weeks versus last year. Demand for residual fuel oil, used for heating, dropped 20.0% y/y but distillate demand rose 6.6%. Inventories of crude oil and petroleum products fell 5.0% year-to-year compared to 10.0% growth in the middle of 2009.

Crude oil prices moved higher last week. Light Sweet Crude averaged $93.24 versus $79.71 averaged during the first week of October. Yesterday, prices were even higher at $95.52 but they remained down from the late-April peak of $113.93. Brent crude remained relatively expensive versus WTI and yesterday sold for $114.50 per barrel. Prices peaked earlier at $126.21.

Finally, natural gas prices fell last week to $3.48 per mmbtu and prices remained lower versus last year's early-January peak of $6.50. Yesterday, prices fell further to $3.36.

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

Weekly Price 11/7/11 10/31/11 10/24/11 Y/Y% 2010 2009 2008
Retail Regular Gasoline ($ per Gallon, Regular) 3.42 3.45 3.46 19.5 2.78 2.35 3.25
Light Sweet Crude Oil, WTI ($ per bbl.) 93.24 92.32 86.71 10.0 79.51 61.39 100.16
Natural Gas ($/mmbtu) 3.48 3.62 3.61 1.7 4.40 3.95 8.88
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