Crude Oil --
The U.S. Energy Administration's (EIA) December 2012 Short-Term Energy Outlook (STEO) forecasts the Brent crude spot price to fall during the first quarter of 2013 rather than rise as it did in early 2012. For 2013 as a whole, EIA expects Brent to average $104 per barrel, an $8-per-barrel decrease from the expected 2012 annual average of $112 per barrel. EIA also expects that OPEC crude oil production in the first half of 2013 will slightly outpace the combined call on inventories and OPEC crude oil production, leading to expected global inventory builds during the first half of 2013.
As of the five trading days ending December 6, implied volatility for the WTI contract settling in March 2013 averaged 28 percent. At current market prices this volatility yields a calculated 95-percent confidence interval of $71 to $113 per barrel. Last year at this time, implied volatility for the March 2012 WTI contract was 41 percent, yielding a much wider calculated 95-percent confidence interval of $69 to $142 per barrel. While Brent prices are higher than WTI prices, Brent implied volatility has also decreased recently, settling at 25 percent on December 6, about a 3-percentage-point decrease from November 1, and its lowest level since the second quarter.
U.S. propane stocks fell 1.3 million barrels to end at 71.2 million barrels last week, 12.0 million barrels (20%) higher than year-ago. Midwest regional inventories dropped by 0.9 million barrels, while Gulf Coast inventories declined by 0.4 million barrels. Rocky Mountain/West Coast stocks dropped by 0.1 million barrels, and the East Coast region gained slightly.
Propylene non-fuel-use inventories represented 5.6 percent of total propane inventories..
Distillate stocks are on the rise but remain well below five year averages -- however, EIA's recent projections from their AEO outlook suggests only a slight uptick in distillate fuel pricing over 2012 moving into 2013.
Inputs Monitor reports farm diesel moving lower since the last week of October through the entire month of November to land last week unchanged over the previous week at $3.576 per gallon.
According to EIA, the national average highway diesel fuel price decreased four cents to $3.99 per gallon, 10 cents higher than last year at this time. The U.S. average highway diesel price has been below the $4-per-gallon mark three out of the last five weeks. Prices decreased in all regions of the nation, with the largest decrease coming on the West Coast, where the price declined six cents to $4.04 per gallon. The Rocky Mountain price is $3.94 per gallon, down a nickel from last week. Decreasing four cents, the Midwest price is $3.98 per gallon, and both the East Coast and Gulf Coast prices dropped three cents, to $4.07 per gallon and $3.87 per gallon, respectively.