Crude Oil & Natural Gas Pricing: January’s average West Texas Intermediate (WTI) crude oil price per barrel increased 2% month on month (m/m). The WTI is down 6% year on year (y/y), coming in at $78.08 / barrel in January 2023 vs. $83.22 / barrel in January 2022.

By comparison, Brent crude also increased 2% m/m to $82.44 / barrel in January 2023, and experienced shrinking of -5% y/y ($ 86.51 / barrel in January 2022). The WTI and Brent crude oil benchmarks are undergoing very similar patterns this month. Additionally in January, the Brent-WTI spread decreased to $4.36.

In addition, we saw the Henry Hub Natural Gas spot price decrease 41% m/m to $3.27 / million Btu. This represents a 25% decrease 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. “Completion of new natural gas pipelines will allow producers to transport more of the natural gas that is produced along with crude oil (associated natural gas) to market, removing a potential constraint on crude oil production.” (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.