Crude Oil & Natural Gas Pricing: January’s average West Texas Intermediate (WTI) crude oil price per barrel increased 3% month on month (m/m). The WTI is down 5% year on year (y/y), coming in at $74.15 / barrel in January 2024 vs. $78.12 / barrel in January 2023.

By comparison, Brent crude increased 3% m/m to $80.12 / barrel in January 2024, and experienced shrinking of -3% y/y ($82.50 / barrel in January 2023). The WTI and Brent crude oil benchmarks are undergoing similar patterns this month. Additionally in January, the Brent-WTI spread increased to $5.97.

In addition, we saw the Henry Hub Natural Gas spot price increase 26% m/m to $3.18 / million Btu. This represents a 3% 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 average annual crude oil prices in 2024 and 2025 will remain near their 2023 average because we expect that global supply and demand for petroleum liquids will be relatively balanced over the next two years. We attribute the relatively small crude oil price changes in our forecast to continued reduced OPEC+ production.” (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.