Fuels in Focus: Farm Diesel Holds Firm, Highway Fuels Soften

December 16, 2013 10:31 AM
 

 

  • Farm Diesel softens 1/2 cent to an average of $3.239 per gallon.
  • Retail Gasoline softened 3 cents to a national average of $3.239 per gallon.
  • Highway Diesel fuel falls 3/4 cent to $3.871 per gallon.

 

At the open the WTI/Brent crude oil spread narrowed $1.53 to $12.48 with Jan 14 Brent opening at $109.03 -- down $2.64 on the week -- and WTI at $96.55 -- $1.11 higher than the same time last week.

Strong export demand for distillate fuels has pressured current inventories to a level below the five-year average. This, along with demand for home heat, will limit downside potential for farm diesel near-term. However, we typically see a soft bottom in farm diesel around Christmas and with the majority of states unchanged on the week, the suggestion is for upside risk ahead.

To the good, inventories of refined fuels like gasoline and highway diesel are currently high, limiting price strength for holiday travelers. This trend is expected to continue as pipeline and refinery capacity improve.

Crude oil production in Libya remained hampered by civil unrest in eastern Libya where dissidents have taken over oil-export terminals and are demanding the Libyan government allow them to export from their own confederation they call Cyrenaica. Libya had targeted national production output of 2 million barrels per day, but current output is 110,000 barrels per day. This is actually seen as price positive for Brent traders who feel increased global stocks would remove premium from the market.

Farm Diesel --

Farm diesel moved 1/2 cent lower this week to a regionwide average of $3.42 with 8 of the 12 states in our Index unchanged. The biggest move was a 4 cent increase in Missouri to $3.44 and Minnesota firmed 2 cents to $3.45. Declines included a 2 cent drop in Nebraska to $3.33 and North Dakota a penny lower to $3.54.

The regionwide low is $3.32 in Iowa with North Dakota at the top end at $3.54.

Farm Diesel 12/16/13
Three Weeks Ago
Previous Week
Current Week
Change
Iowa
$3.31
$3.32
$3.32
Unchanged
Illinois
$3.50
$3.50
$3.50
Unchanged
Indiana
$3.52
$3.52
$3.52
Unchanged
Wisconsin
$3.26
$3.26
$3.26
Unchanged
Minnesota
$3.39
$3.43
$3.45
+$0.02
South Dakota
$3.40
$3.50
$3.50
Unchanged
North Dakota
$3.54
$3.55
$3.54
-$0.01
Nebraska
$3.28
$3.35
$3.33
-$0.02
Missouri
$3.32
$3.40
$3.44
+$0.04
Kansas
$3.37
$3.39
$3.39
Unchanged
Ohio
$3.37
$3.37
$3.37
Unchanged
Michigan
$3.48
$3.51
$3.51
Unchanged
Midwest Average
$3.395
$3.425
$3.42
-1/2 cent

 

Gasoline-

The retail price for regular gasoline softened 3 cents during the report week to a national average of $3.239 -- now 1 1/2 cents below year-ago. The East Coast softened 1 cent to $3.373; Midwest retail gasoline fell 5 1/2 cents this week to $3.079/gallon; Gulf Coast down 5 3/4 cents to $3.047; Rocky Mountain region down 2 1/4 cents to $3.055 and the West Coast softened 5 tenths of a cent to $3.472, according to EIA data.

Highway Diesel --

The national average price of highway diesel fell 3/4 cent to a national average of $3.871 -- 7 1/2 cents below year-ago. East Coast 1/4 cent higher to $3.915/gallon; Midwest 1 3/4 cents lower to $3.852; Gulf Coast highway diesel down 3/4 cent to $3.766; Rocky Mountain region up slightly at $3.852 and the West Coast falls a good penny to $3.982/gallon, according to EIA.


 

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