Crude Oil --
March 2013 Brent Crude futures rose two dollars during the report week, but remain below year ago levels. While the spread between Brent pricing and gasoline pricing -- crack spread -- has been largely stable to narrowing for several weeks, wide variations in gasoline pricing across the United States are still in place. West Coast gasoline priced at $3.50 while Rocky Mountain regional gasoline posted $2.88 per gallon. The difference is a result of better access to less expensive WTI crude in the Midwest and Rocky Mountain regions.
Gasoline prices fell in fourth-quarter 2012 as a result of modestly decreasing crude oil prices and narrowing gasoline crack spreads throughout the United States. Brent crude oil, the crude that U.S. product prices generally track, fell from a September 2012 average of $112.86 per barrel to an average of $109.49 per barrel in December 2012, a decrease of 8 cents per gallon. Most of that decline was in October, and Brent prices remained in a fairly well-defined range from late October through the end of the year. However, decreasing gasoline crack spreads contributed most of the late-2012 price decreases.
As of January 18, U.S. total gasoline inventories stood at 233.3 million barrels, 8.3 million barrels -- 4% above their five-year average level and 37.8 million barrels -- 19% above early-October levels. Some of this inventory build is attributable to typical seasonal patterns. In anticipation of spring refinery maintenance season, market participants will often build inventories in the fourth quarter and early first quarter while demand is lower. However, the 37.8-million-barrel inventory build between the first week of October and mid-January was 17.3 million barrels above the five-year average.
Currently March 2013 WTI Crude up 0.73 to 95.96 -- ranging today from 95.12 to 96.68.
U.S. Propane stocks fell 3.1 million barrels to end at 60.9 million barrels last week, 10.1 million barrels (20 percent) higher than a year ago. Midwest regional inventories dropped by 1.5 million barrels, while Gulf Coast inventories declined by 0.9 million barrels. Rocky Mountain/West Coast stocks dropped by 0.4 million barrels, and stocks in the East Coast region declined by 0.3 million barrels.
Propylene non-fuel-use inventories represented 5.0 percent of total propane inventories.
Distillate stocks continue to make headway into the five-year average adding 0.5 million barrels to the national supply over the report week. This level in storage represents 12.6 million barrels less than last year, and frigid temperatures across the eastern 2/3s of the U.S. Will likely show significant drawdown in next week's petrol report.