Petroleum Report: Fuels Level Off, Crude Spread Still Narrow

June 7, 2013 04:22 AM
 

Crude Oil --

The Brent-WTI spread, the difference between the spot prices of Brent and West Texas Intermediate (WTI) crude oils, has narrowed considerably over the past several months. The spread, which was more than $23 per barrel in mid-February, fell to under $9 in April, and has ranged between $7 and $10 since then. Factors behind the narrowing include:WTIBrentSpread6 7

  • Midstream crude oil infrastructure improvements in the United States
  • With expanded pipeline and crude-by-rail capacity, competitively-priced U.S. crude oil production is backing out imports of Brent-like crude oil, especially crudes from Nigeria, Angola, and Algeria.
  • Seasonal maintenence in Europe
  • Pending changes in tariff policy in South Korea, the world's third largest petroleum importer

 

July 2013 WTI crude oil futures opened today at $94.72 and fell quickly to $93.80. Next support lies at $92.94 and $92.49. A violation of that level would open downside risk to $91.50. Bulls next target is resistance at $95.25,

July 13 Brent crude oil futures opened today at $103.78 and followed WTI's lead to the downside to $102.95 before rebounding slightly. $103 has been a tough line of support here but a move below that level would signal downside risk to $101.60. From there, Brent could find itself with a $90 handle. Resistance stands at $104.23.

The current WTI-Brent crude spread stands at $7.91.

Fuels --

According to EIA, the U.S. average retail price of regular gasoline increased less than one cent to remain at $3.65 per gallon as of June 3, 2013, up three cents from last year at this time. The Midwest price increased six cents to $3.84 per gallon, while prices in the Rocky Mountains rose less than a cent to $3.73 per gallon. The largest decrease came on the West Coast, where the price dropped four cents to $3.89 per gallon.

The national average diesel fuel price decreased one cent to $3.87 per gallon, two cents higher than last year at this time.

Farm Diesel moved slightly higher with 3 of 12 states in our Index unchanged week-over. The regional average price as reported by your Inputs Monitor stands at $3.431/gallon -- up just $0.008 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' for more.

Propane --

Total U.S. inventories of propane increased 1.9 million barrels last week to end at 47.0 million barrels, but are 10.9 million barrels (18.8 percent) lower than the same period a year ago. The Midwest region led the gain with 1.3 million barrels, while East Coast stocks increased by 0.3 million barrels. Gulf Coast inventories increased by 0.2 million barrels, and Rocky Mountain/West Coast inventories gained by 0.1 million barrels. disstuss6 7

Propylene non-fuel-use inventories represented 6.6 percent of total propane inventories.

LP moved $0.003 lower in this week's Monitor to $1.446.

Distillate --

The national distillate supply gained a robust 2.6 million barrels to 123.3 million barrels. The build comes as tempertures warm. Current stocks are 3.2 million barrels above year-ago.


 

 

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