Crude Oil & Natural Gas Pricing: December’s average West Texas Intermediate (WTI) crude oil price per barrel decreased 9% month on month (m/m). The WTI is up 7% year on year (y/y), coming in at $76.44 / barrel in December 2022 vs. $71.71 / barrel in December 2021.

By comparison, Brent crude also decreased 11% m/m to $80.92 / barrel in December 2022, and experienced growth of +9% y/y ($ 74.17 / barrel in December 2021). The WTI and Brent crude oil benchmarks are undergoing very similar patterns this month. Additionally in December, the Brent-WTI spread decreased to $4.48.

In addition, we saw the Henry Hub Natural Gas spot price increase 1% m/m to $5.53 / million Btu. This represents a 47% 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. “From June 8 through the remainder of 2022, crude oil prices generally decreased as concerns about a possible economic recession reduced demand. High petroleum prices were one cause of persistent broad-based inflation in 2022 that affected consumer budgets and gasoline demand. High crude oil prices led to lower U.S. gasoline demand as gasoline prices rose.” (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.