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. More recently, fears of recession have added to its volatility.
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.
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) held relatively steady last week as markets waited for detail on international leaders’ emerging plan to cap Russian oil prices.
WTI closed at $105.76 per barrel on Thursday, up from $104.27 a week earlier, but down from $114.67 on May 31. Its closing price hit a three-month high of $122.11 per barrel on June 8, just shy of the eight-year peak — $123.70 per barrel — reached exactly three months before.
Wyoming’s drilling rig count, an indicator of industry activity, rose back to 19 — a little over half the pre-pandemic rig count — last week after fluctuating between 18 and 19 for all of June.
The weekly rig count is up compared with the previous six months, when it remained between 14 and 16, according to Baker Hughes. The state’s oil companies say the high oil prices are incentive enough to drill, but other, including supply chain issues, obstacles have continued to slow them down.
Companies bid last week on about two-thirds of the tracts available for leasing at Wyoming’s first federal oil and gas auction in a year and a half — a result that was praised by many in the industry but criticized by environmental groups.
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 $4.84 per gallon on Friday, down from $4.93 last Friday and $5.00 one week earlier, according to AAA. The national record remains $5.02 per gallon, reached on June 14.
In Wyoming, however, gasoline prices have continued to climb. Regular gasoline set yet another statewide record of $4.90 per gallon on Friday. That’s up from previous record highs of $4.89 last Friday and $4.83 across Wyoming the week before.
Diesel stayed at about $5.70 per gallon in Wyoming for a second week. It cost $5.62 two weeks ago.
Regular gasoline went up 8 cents in Natrona County, averaging $4.67 per gallon on Friday.
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 began to rise in 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 , and started to drop again in June.
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 $6.33 per million British thermal units, down from $7.11 the week before and the multiyear high of $8.99 set three weeks ago, according to the Energy Information Administration. The daily spot price was lowest on June 24, at $5.89, and highest on June 29, at $6.67.
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. The spot price of natural gas remains more than double that.
The estimated weekly spot price of Powder River Basin coal jumped, the week of June 10, 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 spot price since then 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.
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