Global| Jun 23 2009Gasoline Prices Off Sharply With Weaker Economic News
by:Tom Moeller
|in:Economy in Brief
Summary
Tentative signs of recovery in the U.S. economy have recently become more vague. The immediate effect of this backpedaling is evident in energy markets where the cash market price for a gallon of regular gasoline is down roughly [...]
Tentative signs of recovery in the U.S. economy have recently become more vague. The immediate effect of this backpedaling is evident in energy markets where the cash market price for a gallon of regular gasoline is down roughly twenty-five cents during just the last week. Yesterday, the cash market price for a gallon of regular gasoline was $1.79 versus the daily high of $2.04 last week and the weekly average of $1.98. If sustained these declines likely be reflected in the retail price for regular gasoline which last week rose slightly to an average $2.69 per gallon of regular. That increase pulled prices up by more than $1.00 per gallon, or by more than one-half, from the December low to the highest level since late-October. The figures are reported by the U.S. Department of Energy and can be found in Haver's WEEKLY & DAILY databases.
The tenuous nature of the recovery also is reflected in a lower price for crude oil. Crude prices dropped yesterday to $66.93 from last week's high of $71.37 and from an average $70.61 last week for a barrel of West Texas Intermediate. The speculation of weaker demand came against the backdrop of a 3.8% year-to-year rise in crude oil production during the latest four weeks. In addition, oil is plentiful as evidenced by a 13.4% y/y rise in inventories of crude oil & petroleum products. The figures on crude oil production and inventories are available in Haver's OILWKLY database.
Finally, an earlier plateau of natural gas prices was sustained. The Monday price of $3.96 per mmbtu (-69.4% y/y) held roughly steady with last week but that price was up slightly from the earlier low of 3.56. Current prices are down by two-thirds from the high reached in early-July of $13.19/mmbtu.
Fighting Downturns with Fiscal Policy from the Federal Reserve Bank of San Francisco is available here.
| Weekly Prices | 06/22/09 | 06/15/09 | Y/Y | 2008 | 2007 | 2006 |
|---|---|---|---|---|---|---|
| Retail Regular Gasoline ($ per Gallon, Regular) | 2.69 | 2.67 | -34.0% | 3.25 | 2.80 | 2.57 |
| Light Sweet Crude Oil, WTI ($ per bbl.) | 70.61 | 70.83 | -47.5% | 100.16 | 72.25 | 66.12 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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