Both flavors of crude oil moved higher this morning and set off rounds of profittaking which then pressured prices lower. But both are working on an early afternoon recovery. Despite today's upward movement, both flavors had been cruising the low end for most of the week as talks aimed at easing sanctions against Iranian oil continue.
Sanctions against Iran cost that nation billions just in crude sales alone. All together, the economic sanctions imposed on Iran total $120 billion. Crude oil and fiduciary sanctions are expected to remain in place until Iran concedes and minimizes its nuclear arms production capacity.
Iran claims it does not want to build nukes and has reported it is prepared to pare-down its nuclear capabilities, but complains that sanctions are not set to ease quickly enough. Strength in the U.S. job market has WTI considering the upside, but if Iranian supplies hit the global market, the supply additions added to already brisk production and bulging storehouses would tend to pressure crude pricing even lower.
Crude Oil --
January 2014 WTI crude oil opened $1.06 higher from the previous week this Friday morning at $94.53. Resistance lies at $98.82 and $100.95. A violation of those levels would make $109.00 bulls next target. Next support is at $92.67 and below that, $91.25. A violation of these levels would suggest downside potential to April 15's low at $85.61.
U.S. crude inventories firmed 0.4 million barrels to 388.5 million barrels -- now 14 million barrels above year-ago.
January 2014 Brent crude oil futures opened today at $109.99 and fell away from $111.21 twice. That marks $111.22 as tough short-term resistance but the supply side is strong enough to suggest that level will hold. Next support lies around $109.50 and $108.25. A move below those levels would suggest downside potential to $106.60.
The WTI/Brent crude spread widened $1.46 on the week to $14.70 at the open, with Brent on top.
Home Heat --
- Residential heating oil up a short penny on the week to $3.82.
- Wholesale heating oil up 5 cents to $3.04/gallon.
- Residential propane up 2 cents to $2.50.
- Wholesale propane up 3 cents to $1.41/gallon.
Gasoline slightly higher -- Diesel fuels slightly lower.
The U.S. average retail price of regular gasoline increased three cents to $3.22 per gallon as of November 18, 2013 -- 21 cents lower than last year at this time. Prices fell four cents in the Rocky Mountains and the West Coast to $3.18 per gallon and $3.47 per gallon, respectively, but increased in all other regions. The largest increase came in the Midwest, where the price was up five cents to $3.13 per gallon. On the East Coast the price was $3.28 per gallon, a gain of four cents from last week, and the Gulf Coast price rose three cents to $3.00 per gallon, according to EIA.
The national average diesel fuel price fell one cent to $3.82 per gallon, 15 cents lower than last year at this time, and the lowest price since July 1, 2013. Prices fell in all regions of the nation except the Rocky Mountains, where the price was unchanged from last week at $3.84 per gallon. The West Coast price was two cents lower at $3.95 per gallon, and the East and Gulf Coast prices decreased one cent, to $3.84 per gallon and $3.75 per gallon, respectively. The Midwest price was down less than a penny to $3.79 per gallon, according to EIA.
Farm Diesel softened 2 cents on the week, currently at $3.402. This week's lowest farm diesel was reported to your Monitor in the state of Nebraska at $3.22/gallon with the high mark in Illinois at $3.59. As temperatures fall, look for home heating oil to compete with farm diesel for distillate supplies. That could send farm diesel higher as distillate stocks are falling through the bottom of the five-year average range.
Total U.S. inventories of propane decreased last week by 2.4 million barrels to end at 58.4 million barrels, 14.3 million barrels (19.7%) lower than a year ago. The Midwest and East Coast regions each declined by 0.3 million barrels. Gulf Coast regional stocks fell by 1.8 million barrels. West Coast and Rocky Mountain stocks were unchanged.
Propylene non-fuel-use inventories represented 5.2% of total propane inventories, according to EIA.
LP moved 6 cents higher in this week's Inputs Monitor Index to $1.70. The lowest priced LP in our index is in South Dakota at $1.49 while the high mark is at $2.07 in Michigan.
The national distillate supply fell 4.8 million barrels to 112.5 -- 0.3 million barrels below year-ago.
Graphs and indicated text provided by EIA.
Farm diesel graph from the Inputs Monitor