Gasoline prices turned up slightly in the latest week, ending July 9, but they remain below their May peaks. The latest reading from the Department of Energy (DOE) was $2.981/gallon, up 2.2 cents on the week. At least one reason for the week-to-week increase is the July 4 holiday and the beginning in earnest of the vacation driving season. The same week in 2006 saw $2.973/gallon, so the current level is less than a penny higher. Crude oil prices have also increased from week to week, and they are above their June levels. However, these are below year-ago prices.

These steadier price trends suggest that pressures in the world oil market are diminishing. Indeed, conditions are easing, but relatively so. World product demand appears to have flattened out, with the latest estimate at about 84 million barrel/day through May, according to Oil Market Intelligence. [In Haver's OMI database; June figures are due out shortly.] This peaked in February at 86.2 mil. b/d. In the last several years, February has been each year's peak month, with June and August nearly as high. Year-on-year percentage increases are running somewhat slower than they did back in the autumn. So there are hints here that total demand has at least stopped accelerating, but potential increases due to seasonal needs over the summer keep us from a firm conclusion that it has stopped growing altogether.

In the US, total product demand was 20.8 mil b/d in the latest DOE 4-week reading, almost exactly flat with a year ago. Aggregated to monthly averages, these data show an abrupt slowing of demand growth in June after 4 months that ran 2% to as much as 5.6% ahead of a year ago. Gasoline usage, similarly, is still increasing year-to-year, but noticeably less in the last 2 months than earlier this year. [These US product demand data are in OILWKLY; we have used the "Aggregation" feature of DLXVG3 to facilitate the monthly comparisons here.]