Crude Oil & Natural Gas Pricing: June’s average West Texas Intermediate (WTI) crude oil price per barrel increased 5% month on month (m/m). The WTI is up 61% year on year (y/y), coming in at $114.84 / barrel in June 2022 vs. $71.38 / barrel in June 2021.

By comparison, Brent crude also increased 8% m/m to $122.71 / barrel in June 2022, and experienced growth of +68% y/y ($73.16 / barrel in June 2021). The WTI and Brent crude oil benchmarks are undergoing very similar patterns this month. Additionally in June, the Brent-WTI spread increased to $7.87, the second highest spread this year.

In addition, we saw the Henry Hub Natural Gas spot price decrease 5% m/m to $7.7 / million Btu. This represents a 136% increase y/y.

Figure 1 charts the monthly average spot prices of WTI and Brent crude oil, plus the Henry Hub natural gas spot price from 2000 to present. “Actual price outcomes will largely depend on the degree to which existing sanctions imposed on Russia, any potential future sanctions, and independent corporate actions affect Russia’s oil production or the sale of Russia’s oil in the global market.” (eia.gov).

At Gerdau, we routinely monitor the price of oil issued by the Energy Information Administration since it has a direct impact on the cost of shipping and freight. These costs, in addition to the data we follow on oil and gas rotary rig counts, have been shown to impact long product sales.