Crude Oil & Natural Gas Pricing: August’s average West Texas Intermediate (WTI) crude oil price per barrel decreased 8% month on month (m/m). The WTI is up 38% year on year (y/y), coming in at $93.67 / barrel in August 2022 vs. $67.73 / barrel in August 2021.

By comparison, Brent crude also decreased 10% m/m to $100.45 / barrel in August 2022, and experienced growth of +42% y/y ($70.75 / barrel in August 2021). The WTI and Brent crude oil benchmarks are undergoing very similar patterns this month. Additionally in August, the Brent-WTI spread decreased to $6.78, reversing trend after increasing the last four months.

In addition, we saw the Henry Hub Natural Gas spot price increase 21% m/m to $8.81 / million Btu. This represents a 116% 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. “As European refiners move business away from Russia, they need new sources of crude oil to maintain refinery utilization rates and fuel production. This need for new sources is contributing to higher crude oil prices in Europe to attract crude oil exports to the region.” (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.