Petroleum Report: Distillate, LP Inventories Build -- Crude Spread Narrows

May 31, 2013 05:43 AM

Crude Oil -- WTI5 31

July 2013 WTI crude oil futures opened today at $93.64 and nodded to the upside before sliding nearly a full dollar to $92.65. EIA reports strong movements of light sweet crude oil into Canada for refining. But production has outpaced transport which is handled by rail, placing downward pressure in barrels from the Bakken, Eagle Ford and Western Canadian select crudes.

Next support lies at $91.24. A move below that could signal downside risk to April 17's $87.19. Bulls next target is $96.93. A violation of that level would open upside action to April's high of $97.71.

July 13 Brent crude oil futures opened today at $102.15, and continues to follow a similar path as WTI, chopping lower with downtrending resistance at $101.65 and $101.62. Next support still lies at $100.30. A violation of that mark would suggest downside potential to $98.00. Bulls next target is resistance at $104.20.

The current spread between WTI and Brent lies at $8.66.

Fuels --farmdieselchart

According to EIA, the U.S. average retail price of regular gasoline decreased three cents to $3.65 per gallon as of May 27, 2013, also down three cents from last year at this time.

The largest decrease came in the Midwest, where the price dropped nine cents to $3.78 per gallon.

The national average diesel fuel price decreased 1 cent to $3.88 per gallon, 2 cents lower than last year at this time.

Farm Diesel moved slightly lower with 8 of 12 states in our Index unchanged week-over. The regional average price as reported by your Inputs Monitor stands at $3.423/gallon -- down just $0.001 from the previous week.

According to trends and projections, farm diesel pricing is at or near a seasonal low. The expectation is for farm diesel to average $3.40/gallon in 2013. Current regional averages are very near that level, and prices are likely to inflate through the summer.

Read your Monitor's 'Book Farm Diesel Effectively to Manage Price Risk' from yesterday for more.

Propane --

Total U.S. inventories of propane increased 1.2 million barrels last week to end at 45.1 million barrels, but are 10.5 million barrels (18.9 percent) lower than the same period a year ago.

Propylene non-fuel-use inventories represented 7.6 percent of total propane inventories.disstuss5 31

LP moved 1 penny lower in this week's Monitor to $1.449.

Distillate --

The national distillate supply gained 1.9 million barrels to 120.7 million barrels -- 2.9 million barrels above the same time last year. A break from home heating will give the distillate supply some time for much needed catch-up toward the five-year average.




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