Weekly energy roundup: Wyoming gas prices still rising, coal also up after monthslong fall | Regional News


In Wyoming, most of us fuel our cars with gasoline, heat our homes using natural gas and rely on electricity generated from coal. And we depend on state services paid for, in large part, by taxes imposed on the companies extracting that oil, gas and coal — industries whose contributions to state coffers have also kept our individual taxes low.

The economic importance of energy means price swings often hit Wyoming, especially hard. Money drained from the state’s pockets as oil markets crashed in the early months of the pandemic, then poured back in as markets recovered.

Oil prices have been climbing since the start of 2021. In the months since Russia went to war with Ukraine, the price of oil has skyrocketed. It’s continued to surge as tensions mount and settle as they subside, but never to levels as low as before the invasion.

The price of gasoline went up along with oil and has remained high. For a number of reasons, natural gas followed, giving a boost to its competitor, coal.

Here’s how energy prices changed last week.

Oil

Because oil is traded globally, market disruptions rarely stay where they start. Instead, localized shifts ripple from one market to the next, pushing the world’s prices up or down along with their own.

The price of US oil benchmark West Texas Intermediate (WTI) sank again last week as financial markets reacted to growing fears of recession.

WTI closed at $104.27 on Thursday, down from $117.59 a week earlier and a three-month high of $122.11 per barrel set the Wednesday before. That closing price was just shy of the eight-year peak — $123.70 per barrel — reached on March 8.

Wyoming’s drilling rig count, an indicator of industry activity, dropped back to 18 — still about half the pre-pandemic rig count — last week after rising to 19 the week before.

The weekly rig count has held at or above 18 since the start of June, after hovering between 14 and 16 for the previous six months, according to Baker Hughes. The state’s oil companies say the high oil prices are incentive enough to drill, but other obstacles, including supply chain issues, have slowed them down.

Gasoline

Oil prices are the primary driver of gasoline prices. That’s why the rising cost of oil was quickly reflected at the pump, and a big part of why gasoline has remained so pricey.

The national average price of regular gasoline fell to $4.93 per gallon on Friday, down from $5.00 last Friday and $4.99 per gallon one week earlier, according to AAA. The current national record, just under $5.02 per gallon, was set on June 14.

In Wyoming, however, gasoline prices have continued to climb. Regular gasoline set yet another statewide record of nearly $4.89 per gallon on Friday. That’s up from a previous high of $4.83 across Wyoming last Friday — an increase of 6 cents, compared with 27 cents the week before.

Diesel cost $5.70 per gallon on Friday, up from $5.62 the previous week.

Gasoline averaged $4.59 per gallon in Natrona County.

natural gas

Unlike oil, most natural gas stays in the region where it’s produced. Localized disruptions tend to have significant effects on individual markets, but take much longer to impact others. European natural gas prices went up along with oil prices. While US natural gas prices didn’t change as much at the start of the war, they’ve been on the rise since February, partly because of increased exports to Europe but also due to a confluence of unrelated factors like cold weather, reduced storage and low production.

Economists anticipate that if the war continues for an extended period of time — six months, a year — the US will expand its export infrastructure and companies will ship even more natural gas to Europe, potentially further raising prices here.

The estimated weekly Henry Hub spot price averaged $7.11 per million British thermal units, down from the multiyear high of $8.99 set two weeks ago, according to the Energy Information Administration. The daily spot price fell from $7.89 on June 16 to $6.59 on June 22.

Coal

Demand for Wyoming’s coal is influenced by the cost of other fuels — especially natural gas. Price determines whether utilities generate more electricity at coal-fired or gas-fired power plants.

Coal mined in the Powder River Basin becomes competitive when natural gas tops about $3 per million British thermal units. It’s currently more than double that.

The estimated weekly spot price of Powder River Basin coal jumped, the week before last, to $16.55 per short ton, after declining slowly from $30.70 to $15.45 over the previous seven months. The Energy Information Administration has not updated the most recent spot price due to “systems issues.”

Coal’s current spot price remains above any weekly price recorded in the decade before utilities, fearful this fall of the sky-high natural gas prices forecast by energy analysts, scrambled to secure more coal before winter set in.

.

Leave a Comment

Your email address will not be published.