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, those prices skyrocketed, then eased. They’ve continued to surge as tensions mount and settle as they subside, rising to more muted highs, but never sinking to levels as low as before.
Gasoline went up along with oil, though it hasn’t been as volatile. For a number of reasons, natural gas has followed, giving a boost to its competitor, coal.
Here’s how energy prices changed over the past 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 Brent crude oil, a global benchmark, dipped last week as markets adjusted to the EU’s recent proposed ban on all Russian oil.
Brent closed at $107.45 per barrel on Thursday, down from $110.90 a week earlier and $104.64 on April 12, according to Insider.
U.S. oil benchmark West Texas Intermediate (WTI) followed a similar trend, closing at $106.13 per barrel on Thursday, compared with $108.26 a week ago and $100.60 a month ago.
The closing prices of both Brent and WTI have remained well below the eight-year highs set on March 8, when they hit $127.98 and $123.70 per barrel, respectively.
Wyoming’s drilling rig count, an indicator of industry activity, climbed back up to 16 — about half the pre-pandemic rig count — after remaining at 15 for three consecutive weeks, according to Baker Hughes. The state’s oil companies say high oil prices have incentivized them to drill, but other obstacles, including supply chain issues, are slowing them down.
Oil prices are the primary driver of gasoline prices. That’s why the rising cost of oil was quickly reflected at the pump, and why gasoline has remained so pricey.
The national average price of regular gasoline rose to a new record of $4.43 per gallon on Friday, up from $4.28 one week earlier and $4.16 the week before. That price surpasses the previous highest price (not counting inflation) of $4.33 per gallon that gas hit on March 11, according to AAA.
In Wyoming, gasoline prices have also continued to climb. After tying its record average of $4.12 per gallon, originally set on July 17, 2008, on March 29, regular gasoline set yet another statewide record of nearly $4.24 per gallon on Friday.
That’s up from a previous record high of $4.19 per gallon across Wyoming last Friday, $4.14 a week earlier and $4.08 a month ago.
Gasoline prices went up 9 cents in Natrona County last week, averaging $4.12 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 U.S. 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 Russia 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 U.S. will expand its export infrastructure and companies will ship more natural gas to Europe, potentially further raising prices here.
The estimated weekly Henry Hub spot price averaged $7.72 per million British thermal units, up from $7.42 last week, again surpassing its multiyear high, according to the Energy Information Administration. The price settled through the week, dropping from $8.41 on May 5 to $7.51 on May 11.
Demand for Wyoming’s coal is shaped primarily 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 remained at $15.55 per short ton for the second straight week after remaining at $15.70 per short ton for the previous two weeks, continuing its slow decline from the record $30.70 per short ton reached in November, according to the Energy Information Administration.
Coal’s current spot price is still 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.