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Economy in Brief

U.S. Gasoline Prices Decline Sharply With Slackened Demand
by Tom Moeller  October 23, 2012

The summer driving season is over and the overall economy is weak. That's a prescription for lower gasoline prices. Last week, the pump price for a gallon of regular gasoline dropped thirteen cents (-3.5%) to $3.69 per gallon. That was the largest w/w drop since the last recession. Haver Analytics constructs seasonal factors to account for usual volatility and the adjusted price fell eleven cents w/w to $3.75 per gallon.

Improved mileage standards for passenger cars and the lackluster economy lowered the demand for gasoline 2.3% y/y. The demand for other petroleum products also weakened. Residual fuel oil needs, used for heating, fell 28.6% y/y and distillate demand dropped 4.2% y/y. Lending some support to prices was a 4.4% y/y decline in gasoline inventories.

The price for a barrel of light sweet crude oil ticked up last week to $91.64 per barrel. However, yesterday, the cost of crude reversed that gain and fell sharply to $88.73 per barrel, nearly the lowest level since early August. Prices peaked at $113.93 in April, 2011. Haver's seasonally adjusted crude oil price per barrel inched up last week to $90.74. Brent crude oil prices fell last week to $113.61 per barrel.

Natural gas prices rose last week to $3.31 per mmbtu, an eleven month high.

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 10/22/12 10/15/12 10/08/12 Y/Y% 2011 2010 2009
Retail Regular Gasoline ($ per Gallon, Regular) 3.69 3.82 3.85 6.5 3.52 2.78 2.35
Light Sweet Crude Oil, WTI ($ per bbl.) 91.64 91.38 90.82 5.7 95.14 79.51 61.39
Natural Gas ($/mmbtu) 3.31 3.26 3.21 -8.3 3.99 4.40 3.95
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