Petroleum Prices Stay Steady

The prices for crude oil, natural gas, and other petroleum products were steady during the week of May 1-8.

The U.S. crude oil price for West Texas Intermediate closed on the New York Mercantile Exchange at $79 per barrel on May 8, which is a 9% increase from a year ago.

Retail gasoline prices across the U.S.  averaged $3.643, which is down $0.01 for the week but up $0.11 year over year, according to the Energy Information Administration (EIA).

Other petroleum products, such as diesel and home heating oil, remained fairly constant. Diesel averaged $3.894 per gallon on May 6, down $0.053 from the previous week and down $0.028 from the same period in 2023, according to the EIA.

Crude oil inventories declined 1.4 million barrels last week to 459.5 million barrels, and gasoline inventories rose 0.9 million barrels to 228 million barrels.

International oil traders are concerned that the conflicts in Gaza and Ukraine might have an impact on crude oil supplies.

Natural gas prices at the wellhead have been around $2 per million British thermal units (mmBtu) for most of 2024 on trading on NYMEX for front-month delivery. However, natural gas closed on May 8 at $2.195 per mmBtu, which is the highest since Jan. 29.

U.S. spot natural gas prices are expected to turn negative in the Permian Basin as trading closed at $0.25 at the Waha hub in west Texas.

Energy traders have been saying for weeks that they expected gas prices at the Waha hub to turn negative when U.S. energy company Kinder Morgan started conducting seasonal maintenance on pipelines that move gas from the Permian shale in West Texas to the Gulf Coast.

Kinder Morgan told customers it planned to reduce flows on its Permian Highway Pipeline from May 7-12 and its Gulf Coast Express pipe from May 14-21.

Alex Mills is the former President of the Texas Alliance of Energy Producers.