Gasoline and Diesel Weekly: Distillate Inventories Shelter Farm Diesel From WTI

July 22, 2013 12:05 PM
 

WTI remains at the top of its range and the increases have trickled down to fuel costs. Highway fuels rose dramatically in response to higher U.S. crude pricing while a sturdy distillate supply held farm diesel in check.

The perfect storm is brewing for auto gasoline, fueled by political unrest in North Africa, Canadian shipping difficulties and increased demand for summer travel in the United States. A trifecta of inflationary influences.

Farm Diesel --

Farm diesel moved 1/2 cent higher during the report week to $3.359/gallon according to Inputs Monitor data with seven of the twelve states in our Index unchanged. The price at the same time last year was $3.17 -- 19 cents below today's price.

All of the declines this week were 2 cents. Minnesota down 2 cents to $3.37; South Dakota down 2 cents to $3.32 and Michigan gave up 2 cents of its own to end at $3.41. Missouri and Illinois posted the only increases with MO up 7 cents to $3.29 and IL up a penny to $3.49.

The word around the campfire is that WTI will come back below $100 in the 'sometime-term', but crude futures are currently propped up by uncertainty in Egypt and the Suez Canal implications -- 4 million barrels per day transit the canal. Wall Street's romance with natgas futures has cooled, and crude has wooed traders' attention for the time being. The other factor supporting crude futures is trouble in Canada -- the #1 crude supplier to the U.S. -- including a deadly train derailment in Quebec and pipeline difficulties in Alberta to the tune of roughly 1 million barrels per day.

This will continue to chase gasoline and highway diesel fuel prices higher. Farm diesel does have just a bit of insulation as the distillate supply has made some good ground toward the five-year average supply in the past few months. We still maintain that farm diesel will move higher in the short term, and with crude at the top of its range amid continued turmoil, all signs point to higher fuels ahead.

Farm Diesel 7/22/13
Three Weeks Ago
Previous Week
Current Week
Change
Iowa
$3.27
$3.28
$3.28
unchanged
Illinois
$3.45
$3.48
$3.49
+$0.01
Indiana
$3.50
$3.50
$3.50
unchanged
Wisconsin
$3.23
$3.23
$3.23
unchanged
Minnesota
$3.41
$3.39
$3.37
-$0.02
South Dakota
$3.34
$3.34
$3.32
-$0.02
North Dakota
$3.54
$3.55
$3.55
unchanged
Nebraska
$3.26
$3.25
$3.25
unchanged
Missouri
$3.22
$3.22
$3.29
+$0.07
Kansas
$3.27
$3.27
$3.27
unchanged
Ohio
$3.33
$3.33
$3.33
unchanged
Michigan
$3.52
$3.43
$3.41
-$0.02
Midwest Average
$3.361
$3.355
$3.359
+$0.004

Gasoline-

The retail price for regular gasoline firmed 4 1/2 cents during the report week to a national average of $3.684.

East Coast gasoline added 6 1/2 cents to $3.655; Midwest adds 2 1/2 cents over the week to $3.665; Gulf coast up 6 1/2 cents to $3.507; Rocky Mountain region firms just five tenths of a cent to $3.616 and West Coast gasoline 3 cents higher at $3.954.

Highway Diesel --

The national average price of highway diesel was up 3 1/2 cents to $3.903 -- 12 cents above year-ago.

East Coast highway diesel added 4 1/2 cents again this week to $3.919; Midwest added 2 cents to $3.875; Gulf coast up 4 1/2 cents to $3.841; Rocky Mountain diesel up 3 3/4 cents to $3.866 and West Coast highway diesel up 4 1/2 cents to $4.041.


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