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Economy in Brief

U.S. Crude Oil Costs Spike: "It's the Libyans"
by Tom Moeller  February 23, 2011

That was the cry in the 1985 hit movie "Back to the Future." Today, it's no joke. Now the risk that political turmoil in the country will involve others in the region has oil markets concerned about supply. As a result, crude oil prices spiked yesterday to $93.57 per barrel of light sweet crude (WTI). The price compares to an average $79.51 during all of last year. Brent crude surged as well to $106.00.

Gasoline prices have followed the gain in crude costs. The pump price for regular gasoline last week rose five cents to $3.19 per gallon, its highest since October 2008. The latest was roughly double the December-2008 low of $1.61. Typically, pump prices decline this time of year due to lessened seasonal demand. To account for this pattern, Haver Analytics calculates seasonal factors and the adjusted gasoline price moved higher to $3.38 per gallon. Yesterday, the spot market price for a gallon of regular gasoline jumped to $2.58 from an average $2.51 last week.

Demand for gasoline slipped 0.1% last week versus last year. The demand for residual fuel oil, used for heating, increased 0.2% and distillate demand rose 2.7% y/y. Inventories of crude oil and petroleum products rose a greatly lessened 1.4% during the last twelve months, down from a peak 11% in September 2009.

Lastly, natural gas prices fell to an average of $3.89 per mmbtu. Yesterday, prices held at $3.89 and were down from last year's early-January high of $6.50.

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 2/21/11 2/14/11 2/7/11 Y/Y% 2010 2009 2008
Retail Regular Gasoline ($ per Gallon, Regular) 3.19 3.14 3.13 20.1 2.78 2.35 3.25
Light Sweet Crude Oil, WTI ($ per bbl.) 85.34 86.69 90.68 9.0 79.51 61.39 100.16
Natural Gas ($/mmbtu) 3.89 4.16 4.52 -28.1 4.40 3.95 8.88
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