Petroleum Report -- WTI and Brent Stair-step Higher

April 26, 2013 05:46 AM

Since reaching a 2013 high of $119 per barrel in mid-February, the spot price of Brent crude oil fell by $19 per barrel, settling at $100 per barrel on April 22. Concerns over sluggish global macroeconomic growth, a seasonal decline in European and Asian refinery runs, and an increase in North Sea production have been cited as fundamentals driving Brent prices lower.

Over this same period, the price of Louisiana Light Sweet (LLS) crude on the U.S. Gulf Coast also declined for the same reasons. More recently, with the increase in U.S. production of light sweet crude oil, including Bakken and Eagle Ford, imports of light sweet crude processed at the Gulf have declined significantly to less than 70,000 barrels per day in January 2013. As a result, there are now fewer cargoes available on short notice, so when LLS supplies were constrained in mid-March, there were no readily available replacement barrels and LLS prices increased.

Crude Oil -- crstuss4 26

June 13 WTI crude has stairstepped its way to resistance just short of $94.00/barrel. Support lies at $91.50 but the contract is currently up 53 cents to $93.11. Pipeline repairs and improvements in Louisiana will limit upside action,

Meanwhile June 13 Brent has followed a similar stairstep path to the top end of its range opening today at $103.01, flirting with yesterday's high of $103.50 and threatening upside action on the day.

Fuels --

The U.S. average retail price of regular gasoline decreased less than one cent to remain at $3.54 per gallon as of April 22, 2013, down 33 cents from last year at this time. The U.S. average price has decreased 25 cents over the last eight weeks. Prices were lower in all regions of the nation except the Midwest, where the price increased nine cents to $3.55 per gallon.

Farm Diesel moved slightly lower in the Inputs Monitor Regional Index, falling $0.028 to an average of $3.502/gallon. The largest increase in farm diesel last week corresponded with a spike in fertilizer pricing in Missouri where the price of ruby red added $0.07 to $3.41. These increases in Missouri may signal things to come as northern growers get into the field.

Propane --

According to EIA, U.S. propane stocks fell 0.1 million barrels to end at 39.0 million barrels last week, and are 8.5 million barrels -- 17.9% -- lower than the same period a year ago. Gulf Coast inventories dropped by 0.4 million barrels, while Rocky Mountain/West Coast stocks declined slightly. Midwest and East Coast inventories each increased by 0.2 million barrels.

Propylene non-fuel-use inventories represented 9.6 percent of total propane inventories.

LP $0.03 lower to $1.46/gallon on the farm according to Inputs Monitor data.disstuss4 26

Distillate --

The national distillate supply increased 0.1 million barrels to 115.3 million barrels. That is another good improvement toward the five-year average but current levels remain 10.6 million barrels below year-ago. We expect continued improvements to the distillate supply as temperatures warm over the nation.





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