Farm Fuels in Focus: LP Relief Drives Price Lower

March 3, 2014 10:09 AM
 

 Picture2

  • Farm Diesel firms 4 cents to an average of $3.58 1/2 per gallon.
  • Distillate stocks are 11.1 million barrels below year-ago at 113.1 Mmbbl -- April heating oil opened at $3.02 this morning -- six cents lower than last week's report.
  • LP softens 97 cents in regional averages to $2.78/gallon.
  • National propane stocks are 21.17 Mmbbl behind year-ago at 26.67 Mmbbl -- April Natural gas opened this morning at $4.69 -- $1.61 below last week's Farm Fuels Report.

 

LP -- Propane softened 97 cents in regional averages this week to $2.78 as a result of the prioritization of 500,000 barrels shipped northward from Mont Belvieu, TX to Midwestern and Northeastern supply hubs.

The regionwide low currently lies at $1.99 in Nebraska and the Midwest high is at $3.34 in Wisconsin. Kansas is the only state unchanged this week after leading declines last week. Upward movers were Illinois and Michigan.

Below, we table propane and farm diesel prices as reported to your Inputs Monitor for the week ended February 28, 2014.

Propane 2/28/14
Previous Week
Current Week
Change
Iowa
$4.76
$2.28
-$2.48
Illinois
$2.39
$3.10
+$0.71
Indiana
$3.57
$3.29
-$0.28
Wisconsin
$5.10
$3.34
-$1.76
Minnesota
$4.62
$2.57
-$2.05
South Dakota
$4.30
$2.99
-$1.31
North Dakota
$3.02
$2.99
-$0.03
Nebraska
$4.22
$1.99
-$2.23
Missouri
$3.53
$2.50
-$1.03
Kansas
$2.41
$2.41
Unchanged
Ohio
$3.89
$2.69
-$1.20
Michigan
$3.21
$3.31
+$0.10
Midwest Average
$3.75
$2.78
-97 cents

 

Farm Diesel -- Picture1

Farm diesel firmed 4 cents this week to a regionwide average of $3.58 1/2 with 2 of the 12 states in our index unchanged. The biggest move was a 29 cent increase in Missouri to $3.55 and a 17 cent decline in Nebraska to $3.44.

The front-month April heating oil contract looked like it wanted to head higher last week, but this week we find heating oil generally steady. We will look for heating oil futures to indicate a possible tightening of supplies in distillate markets, which would lead to a spike in farm diesel prices.

The cards are, however, stacking against farm diesel and as distillate stocks continue to decline amid $100.00+ WTI crude, the threat of military action in the Black Sea may inject a war premium into WTI pricing. Some have argued for WTI pricing near $120.00 if Russian crude exports are disrupted. That would place pressure on North American light sweet crude supplies and given the already lagging global supply due to unrest in Libya, a Russian export crisis could further trim global stocks, placing a premium on WTI.

The regionwide low currently lies at $3.34 in Kansas and the Midwest high is at $3.79 in Ohio.

Farm Diesel 2/28/14
Three Weeks Ago
Previous Week
Current Week
Change
Iowa
$3.35
$3.40
$3.46
+$0.06
Illinois
$3.44
$3.78
$3.81
+$0.03
Indiana
$3.72
$3.72
$3.72
Unchanged
Wisconsin
$3.66
$3.71
$3.73
+$0.02
Minnesota
$3.39
$3.43
$3.51
+$0.08
South Dakota
$3.49
$3.49
$3.52
+$0.03
North Dakota
$3.53
$3.53
$3.54
+$0.01
Nebraska
$3.62
$3.61
$3.44
-$0.17
Missouri
$3.26
$3.26
$3.55
+$0.29
Kansas
$3.27
$3.31
$3.34
+$0.03
Ohio
$3.39
$3.79
$3.79
Unchanged
Michigan
$3.48
$3.52
$3.63
+$0.11
Midwest Average
$3.46
$3.54 1/2
$3.58 1/2
+4 cents

 


 

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