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Economy in Brief

U.S. Petroleum Prices Slide Yet Again
by Tom Moeller  June 26, 2012

Weak demand for petroleum products continued to depress prices last week.The pump price of regular gasoline declined nine cents to $3.44 per gallon. Since early April prices have fallen fifty cents (-12.8%). Haver Analytics' seasonally-adjusted price for regular also declined nine cents to $3.14 per gallon. This price is lower than the actual cost since prices typically rise with the summer driving season. Yesterday, the wholesale price for a gallon of unleaded was $2.46 versus $3.55 averaged last week.

Reduced driving and improved fuel economy lowered the demand for gasoline by 5.0% y/y last week. The demand for residual fuel oil, used for heating, was off 41.3% and distillate demand fell 1.7% y/y. Inventories of crude oil and petroleum products ticked up 0.2% year-to-year. That comparison was improved versus the 5.0% decline this past fall.

The price for a barrel of light sweet crude oil was off $1.12 last week to $83.32 as global demand weakened. Yesterday, the cost of crude rose to $84.00 per barrel. Prices peaked at $113.93 in April, 2011. Brent crude declined last week to $99.25 per barrel and fell further to $98.30 yesterday.

Natural gas prices rose to $2.54 per mmbtu but were down 41.3% y/y. Yesterday, prices slipped to $2.46 and still were off from the early-January 2010 peak 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.

Weekly Price 06/25/12 06/18/12 06/11/12 Y/Y% 2011 2010 2009
Retail Regular Gasoline ($ per Gallon, Regular) 3.44 3.53 3.57 -3.8 3.52 2.78 2.35
Light Sweet Crude Oil, WTI ($ per bbl.) 81.41 83.32 84.44 -12.3 95.14 79.51 61.39
Natural Gas ($/mmbtu) 2.54 2.24 2.33 -41.3 3.99 4.40 3.95
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