Another week, another record

CASPER — 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, 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 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 U.S. oil benchmark West Texas Intermediate (WTI) held relatively steady last week amid ongoing supply worries. WTI closed at $114.09 per barrel on Thursday, up from $112.21 a week earlier and $101.70 on April 26. 

Its closing price has remained well below the eight-year high of $123.70 per barrel set on March 8. 

Wyoming’s drilling rig count, an indicator of industry activity, remained at 16 — about half the pre-pandemic rig count — for a third consecutive week after holding at 15 for the previous three weeks, according to Baker Hughes. 

The state’s oil companies say the high oil prices have incentivized them to drill, but other obstacles, including supply chain issues, continue to slow 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 dipped one-tenth of a cent below its Thursday peak of $4.60 per gallon on Friday, up from $4.59 last Friday and $4.43 one week earlier, according to AAA. 

In Wyoming, gasoline prices have also continued to climb. 

Regular gasoline set yet another statewide record of nearly $4.33 per gallon on Friday. That’s up from a previous record high of $4.29 across Wyoming last Friday. 

Gasoline prices went down three cents in Natrona County last week, averaging $4.11 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 $8.47 per million British thermal units, up from $7.93 the previous week, another multi year high, according to the Energy Information Administration. 

The daily price rose from $8.17 on May 19 to $9.30 on May 25. 

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 stayed at $15.50 per short ton for a second week after remaining at $15.55 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. Utility companies, fearful last fall of the sky-high natural gas prices forecast by energy analysts, scrambled to secure more coal before winter set in.