Planned and unplanned refinery maintenance as well as longer-term refinery upgrading projects over the past few months reduced gasoline production in the Midwest, pushing gasoline inventories lower and gasoline prices higher.
Chicago conventional spot prices increased $0.36 over four days in mid-April and continued upward before spiking another $0.57 between May 29 and June 3, sending regional retail prices to recent or all-time highs. Conventional gasoline spot price differentials between Chicago and New York Harbor approached $1 per gallon at their peak on June 3. The Chicago spot price has since come down, falling $1.10 during the rest of June as refineries returned to full production, with declines in retail prices following.
Beginning in mid-April, refinery maintenance caused gasoline inventories in the Midwest to fall sharply – by more than 6 million barrels, moving stocks from the top to the bottom of the five-year range – before recovering in May and June as major refineries restarted from maintenance, long-term upgrades were completed, and product from the Rocky Mountain region entered the market. With production returning to normal levels, prices in the Midwest have come down significantly, with retail prices dipping below the national average on June 24 for the first time in more than two months.
Crude Oil --
August 2013 WTI crude oil futures opened today at $99.61 and crossed over $100.00, further narrowing the Brent-WTI spread. Unrest in Egypt is having a greater than expected impact on U.S. crude, but weak Chinese economic projections, a pipeline spill in Alberta and several North African shutdowns have the market on edge. August WTI closed $1.44 higher today at $101.04.
August 13 Brent crude oil futures opened today at $104.57 and moved only slightly higher, adding $1.63 on the day despite the impending military coup in Egypt. The fear premium is expected to inflate pricing, but the increases have yet to show up on the chart for Brent. WTI is taking the heat this time around. August Brent futures closed today at $105.63.
Presently the WTI/Brent Crude spread is at $4.59.
According to EIA, The U.S. average retail price of regular gasoline decreased eight cents to $3.50 per gallon as of July 1, 2013, 14 cents higher than last year at this time. The U.S. average price has decreased 16 cents over the last three weeks, to the lowest level since January 28. Prices fell in all regions, led by a 15-cent decrease in the Midwest to $3.39 per gallon, down 47 cents over the last three weeks.
The national average diesel fuel price decreased two cents to $3.82 per gallon, 17 cents higher than last year at this time. Prices fell in all regions, led by a Midwest price decrease of three cents to $3.82 per gallon. The East Coast, Rocky Mountain, and West Coast prices are all lower by two cents, to $3.82, $3.82, and $3.94 per gallon, respectively. Rounding out the regions, the Gulf Coast price is $3.73 per gallon, a penny lower than last week.
Farm Diesel moved 1 3/4 cents lower according to Inputs Monitor data to a regional average of $3.401/gallon. The highest price was recorded in the state of North Dakota at $3.56 while Nebraska captured the regionwide low at $3.27.
Total U.S. inventories of propane increased 1.5 million barrels from last week to end at 56.4 million barrels, but are 5.9 million barrels (9.4 percent) lower than the same period a year ago. The Midwest region led the gain with 1.1 million barrels, while Rocky Mountain/West Coast stocks increased by 0.2 million barrels. East Coast and Gulf Coast stocks each increased by 0.1 million barrels.
Propylene non-fuel-use inventories represented 5.7 percent of total propane inventories.
LP moved one cent lower in the Inputs Monitor Index to $1.404.
The national distillate supply softened 2.4 million barrels to 128.8 -- 3.0 million barrels above year-ago.