Crude Oil --
September 2013 WTI crude oil futures opened today at $105.37 and spent the morning flirting with $104.00, but found strong support near there and moved higher through mid-morning. Yesterday's close was $16.89 higher than the same time last year, but encouragingly $1.09 below week-ago.
U.S. crude stocks fell another 2.8 million barrels to 364.2 million barrels -- now 18 million barrels behind year-ago. This marks the second consecutive week of disappointing storage news and higher WTI prices are reflective of supply and transit constraints. But production is on the rise and while some on Wall Street suspect WTI may move higher from here, prices seem to be looking for an excuse to revisit a level below $100.
To the good, natural gas pricing has fallen in response to increased crude production and prices are within our 'go' range, opening today at $3.70 and trailing. The charts to the right show what energy watchers already assume -- when crude goes up, natgas goes down. As crude corrects from all of this upside action, natgas futures are expected to respond with a flare up of their own.
September 13 Brent crude oil futures are working to expand the WTI/Brent spread. Brent futures opened today at $106.89 and moved higher. Political unrest and shut downs at Libyan ports by protesters have had little impact on Brent pricing. WTI has presented itself on the world stage as a stopgap to the fear premium, and while the loose coupling of WTI and Brent has insulated Brent pricing, with WTI and Brent pricing at parity, the United States may lose its pricing advantage.
Currently, the WTI/Brent crude spread stands at $2.44 with Brent back on top.
According to EIA, the U.S. average retail price of regular gasoline increased five cents to $3.68 per gallon as of July 22, 2013, up 19 cents from last year at this time. The largest increase came on the East Coast, where the price is up seven cents to $3.66 per gallon. The Gulf Coast price is $3.51 per gallon, six cents higher than last week. The West Coast price is $3.95 per gallon, three cents higher. The Midwest price is $3.66 per gallon, two cents higher. Rounding out the regions, the Rocky Mountain price increased a penny to $3.62 per gallon.
The national average diesel fuel price increased four cents to $3.90 per gallon, 12 cents higher than last year at this time. The East Coast, Gulf Coast, Rocky Mountain, and West Coast prices all increased four cents, to $3.92, $3.84, $3.87, and $4.04 per gallon, respectively. Rounding out the regions, the Midwest price is up two cents to $3.88 per gallon.
Farm Diesel moved 4 tenths of a cent higher according to Inputs Monitor data to a regional average of $3.359/gallon with half of the states in our index unchanged. The highest price was recorded again in the state of North Dakota at $3.55, unchanged over last week, while Wisconsin captured the regionwide low at $3.23.
Total U.S. inventories of propane increased 1.5 million barrels from last week to end at 59.4 million barrels, but are 6.6 million barrels (10.0 percent) lower than the same period a year ago. The Midwest region led the gain with 0.9 million barrels, while Gulf Coast stocks increased by 0.5 million barrels. Rocky Mountain/West Coast stocks increased by 0.4 million barrels, and East Coast stocks decreased by 0.4 million barrels.
Propylene non-fuel-use inventories represented 5.4 percent of total propane inventories.
LP moved 3 cents lower in the Inputs Monitor Index to $1.318. The lowest priced LP in our index is in Nebraska at $1.18 while the high mark is at $1.69 in Michigan.
The national distillate supply fell 1.2 million barrels to 126.5 -- 1.2 million barrels above year-ago. This represents another solid gain toward the five-year average supply and should continue to limit the upside for farm diesel, and if we are lucky, home heat this winter.