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Economy in Brief

U.S. Petroleum Prices Plunge as Demand Dries Up
by Tom Moeller  April 21, 2020

• Crude oil prices slid lower last week and dropped further yesterday.

• Gasoline prices fall as drivers stay off the road.

• Natural gas prices ease.

The spot price of West Texas Intermediate crude oil weakened to $20.10 (-68.5% y/y) per barrel last week from an average $24.40 one week earlier. It was the lowest price since February 2002. Yesterday, prices actually turned negative as oil producers paid buyers to take oil over fears of continued weak demand and a lack of storage. The price of Brent crude oil declined to an average of $29.18 last week. The price has fallen from a $67.38 high averaged in the last week of December. Yesterday, the price was $25.93.

Retail gasoline prices declined to $1.81 per gallon (-36.2% y/y) in the week ended April 20 from $1.85 per gallon in the previous week. Prices remained below their May 2019 peak of $2.90 per gallon. Haver Analytics adjusts the gasoline price series for regular seasonal variation. The seasonally adjusted price fell to $1.73 per gallon from $1.79.

The average price of natural gas edged lower to $1.72/mmbtu (-34.5% y/y) last week after rising to $1.77 in the prior week. They remained below the peak of $2.81/mmbtu early in November. Yesterday, the price was $1.86/mmbtu.

Reduced oil & product prices reflect a collapse in demand and a rise in supply. In the four weeks ending April 10, gasoline demand declined 31.6% y/y, while total petroleum product demand fell 18.5% y/y. Crude oil input to refineries declined 10.7% y/y in the past four weeks. At the same time, gasoline inventories rose 15.0% y/y and inventories of all petroleum products increased 4.9% y/y.

These data are reported by the U.S. Department of Energy. The price data can be found in Haver's WEEKLY and DAILY databases. Greater detail on prices, as well as the demand, production and inventory data, along with regional breakdowns, are in OILWKLY.

Weekly Energy Prices 04/20/20 04/13/20 04/06/20 Y/Y % 2019 2018 2017
Retail Gasoline ($ per Gallon Regular, Monday Price, End of Period) 1.81 1.85 1.92 -36.2 2.57 2.27 2.47
Light Sweet Crude Oil, WTI ($ per bbl, Previous Week's Average) 20.10 24.40 21.72 -68.5 56.91 64.95 50.87
Natural Gas ($/mmbtu, LA, Previous Week's Average) 1.72 1.77 1.62 -34.5 2.57 3.18 2.99
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