Global| May 27 2009Gasoline Prices Reach Their Highest Level Since October
by:Tom Moeller
|in:Economy in Brief
Summary
The news that the U.S. economy, notably the consumer, is recovering from the Winter doldrums has given further life to energy prices. Suspecting that a more confident consumer will drive further, regular gasoline prices last week [...]
The news that the U.S. economy, notably the consumer, is recovering from the Winter doldrums has given further life to energy prices. Suspecting that a more confident consumer will drive further, regular gasoline prices last week continued their recent upturn and rose to an average $2.44 per gallon of regular. The gains have taken prices up by 82 cents, or by one-half, from the December low to the highest level since early-November. Yesterday, cash market prices traded higher still at $1.80 per gallon versus $1.78 averaged last week and these were the highest prices since last October. The figures are reported by the U.S. Department of Energy and can be found in Haver's WEEKLY & DAILY databases.
A strengthening of crude oil prices has continued together with the gains in gasoline costs. Crude prices averaged $60.48 last week for a barrel of West Texas Intermediate, up from the December low of $32.37 per barrel. Yesterday, crude oil prices rose even further to $62.45. Prices reached a high of $145.66 last July. The latest increases occurred despite a 2.7% year-to-year rise in crude oil production during the latest four weeks. The figures on crude oil production are available in Haver's OILWKLY database.
For the moment, higher gasoline prices & economic weakness continue to lower gasoline demand, last week by 2.7% y/y. The change in demand is measured using the latest four weeks versus the same four weeks in 2008. Demand for all petroleum products was down 7.6% y/y led by a 38.8% drop in demand for residual fuel oil and a 14.9% drop in distillate demand. In addition, the price gains have occurred despite an 11.0% rise in inventories of crude oil & petroleum products. These numbers also are available in Haver's OILWKLY database.
Finally, the gains in the price of natural gas paused last week and it fell back to $3.77 per mmbtu (-66.6% y/y). The latest price was nearly the lowest since 2002 and is down by two-thirds from the high reached in early-July of $13.19/mmbtu.
Prospects for Oil Market Stability from the International Monetary Fund can be found here.
| Weekly Prices | 05/25/09 | 05/18/09 | Y/Y | 2008 | 2007 | 2006 |
|---|---|---|---|---|---|---|
| Retail Regular Gasoline ($ per Gallon, Regular) | 2.44 | 2.31 | -38.2% | 3.25 | 2.80 | 2.57 |
| Light Sweet Crude Oil, WTI ($ per bbl.) | 60.48 | 58.07 | -53.5% | 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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