Crude Oil & Natural Gas Pricing: July’s average West Texas Intermediate (WTI) crude oil price per barrel increased 8% month on month (m/m). The WTI is down 25% year on year (y/y), coming in at $76.07 / barrel in July 2023 vs. $101.62 / barrel in July 2022.

By comparison, Brent crude increased 7% m/m to $80.11 / barrel in July 2023, and experienced shrinking of -28% y/y ($111.93 / barrel in July 2022). The WTI and Brent crude oil benchmarks are undergoing similar patterns this month. Additionally in July, the Brent-WTI spread decreased to $4.04.

In addition, we saw the Henry Hub Natural Gas spot price increase 17% m/m to $2.55 / million Btu. This represents a 65% 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. “We forecast higher crude oil prices in the second half of 2023 and into 2024 because of moderate but persistent inventory drawdowns. Inventory drawdowns take place when demand for a commodity is greater than the supply of that commodity.” (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.