Crude Oil & Natural Gas Pricing: January’s average West Texas Intermediate (WTI) crude oil price per barrel increased 16% month on month (m/m) – its first increase in two months. The WTI is up 60% year on year (y/y), coming in at $83.22 / barrel in January 2022 vs. $52.00 / barrel in January 2021.

By comparison, Brent crude also increased 17% m/m to $86.51 / barrel in January 2022, and experienced growth of +58% y/y ($54.77 / barrel in January 2021). The WTI and Brent crude oil benchmarks are undergoing very similar patterns this month.

In addition, we saw the Henry Hub Natural Gas spot price increase 16% m/m to $4.38 / million Btu. This represents a 62% 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. Until the U.S. shale revolution of the 2010’s, the WTI oil benchmark was higher than that of Brent’s. But increased production and supply following the implementation of fracking has driven the price / barrel of the WTI lower than Brent ever since.

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.