Weakening demand is affecting prices in the energy market. Last week, the pump price for regular gasoline fell to $3.85 per gallon though it remained up roughly one-third y/y. Moreover, pump prices usually start rising this time of year in anticipation of increased seasonal demand. To account for this pattern, Haver Analytics calculates seasonal factors. As a result, the adjusted gasoline price fell further to $3.56 per gallon, it's lowest since late-February. Yesterday, the spot market price for a gallon of regular gasoline rose to $2.91 versus $2.86 last week, but it still was down from the late-April high of $3.30.

Weaker demand also is affecting crude oil prices which fell last week to an average $98.46 for a barrel of WTI. The price compares to the recent high of $113.93. Prices fell further yesterday to $97.70.

Higher prices continued to negatively affect demand for petroleum products. Gasoline demand fell 2.3% on average during the last four weeks versus last year. Conversely, the demand for residual fuel oil, used for heating, rose 7.1% y/y but distillate demand fell 2.9%. Inventories of crude oil and petroleum products fell 2.2% year-to-year compared to 10.0% growth in the middle of 2009.

Finally, natural gas prices slipped w/w to $4.14 per mmbtu. Yesterday, prices recovered the decline and rose to $4.32. Prices remained 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

Household Inflation Expectations and the Price of Oil: It's Déjà Vu All Over Again from the Federal Reserve Bank of San Francisco can be found here.