Petroleum Report -- Price Declines Continue, Distillate Supply Improves

April 18, 2013 07:09 AM

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The price of retail gasoline continues its downward movement for the seventh consecutive week. The spread between premium and regular gasoline reached 30 cents per gallon for the first timeduring the report week. January 2013 recorded an all time high of 33 cents and that figure has been relatively consistent since then. By contrast, the spread in 2000 was 18 cents.

The widening spread is a result of increased vehicle fuel efficiency, consumer preferences and improvements to ethanol blending. After the use of premium gasoline peaked in the late 1980s, its consumption has fallen by more than 50 percent. In 1989, premium accounted for slightly more than a quarter of all gasoline sold in the United States; since 2006, that share has been between 8.5 and 9.5 percent

Crude Oil --

May 13 WTI crude currently (Noon CT) at $87.80. The contract opened today at $86.39 and trended higher to post resistance at $88.00. A move above that level cold signal upside potential to $89.00/barrel, and then $90. But May WTI has trended lower all week. Current support lies at $85.80 and a violation of that level would indicate downside potential to $85.00/barrel.

Meanwhile Brent crude has caught an upside draft, opening today at $96.87 and as traders reenter this market, we expect prices to climb above $100.00/barrel once the contract moves above resistance at $99.33.

Fuels --

The U.S. average retail price of regular gasoline decreased seven cents from the previous week to $3.54 per gallon, down 38 cents from last year at this time. Prices were lower in all regions of the nation, with the largest decrease in the Midwest, where the price fell 10 cents to $3.46 per gallon.

The national average diesel fuel price decreased four cents to $3.94 per gallon, 19 cents lower than last year at this time. Prices decreased in all regions of the nation, with the largest decrease on the West Coast, where the price fell five cents to $4.07 per gallon.

Farm Diesel was unchanged in the Inputs Monitor Regional Index at $3.53. The only exception to the across the board pause was a one penny increase in Iowa Farm Diesel.

Propane --

According to EIA, U.S. propane stocks fell 1.0 million barrels to end at 39.0 million barrels last week, and are 7.3 million barrels (15.8 percent) lower than the same period a year ago. Gulf Coast inventories dropped by 1.4 million barrels, while East Coast inventories declined slightly. Midwest inventories increased by 0.4 million barrels, and Rocky Mountain/West Coast stocks gained 0.1 million barrels.

Propylene non-fuel-use inventories represented 9.2 percent of total propane inventories.

LP $0.001 lower to $1.495/gallon on the farm according to Inputs Monitor data.

Distillate --disstuss4 18

The national distillate supply increased 2.4 million barrels to 115.2 million barrels. That is a good improvement toward the five-year average but current levels remain 13.8 million barrels below year-ago. We expect continued improvements to the distillate supply as temperatures warm over the nation, but snow is reportedly falling in Omaha right now, and near-term winter weather could stifle growth the the distillate supply in the next few days.





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