Farm Fuels in Focus: Diesel Firms as Crude Slips

June 17, 2016 12:18 PM

Farm Fuels in Focus: Diesel Firms as Crude Slips

  • July 2016 natural gas opened today at $2.58 -- down a penny from our last Fuels in Focus.
  • Farm Diesel is up 4 cents on the week at an average of $1.86 per gallon.
  • July 2016 WTI crude oil opened the day at $45.99 -- down $4.48 from our last report.
  • July 2016 Heating oil futures opened the day at $1.48 -- down 7 cents from our last report.

dieselFarm Diesel -- Distillate supplies rebounded this week according to EIA which longer-term should be price negative on farm diesel. Also working in favor of lower diesel prices is WTI crude oil's rejection of the $50 level. While the expectation is for crude oil to remain within the $40-$50 range near-term, unplanned outages are beginning to come back online, which will feed the global glut and may pressure prices back down into the high $30's per barrel. That would also apply certain pressure to farm diesel prices, but not until refiners have replaced current supplies with diesel produced from the cheaper crude oil. That could take until fall, and is an outside chance since a test of a $30 handle in crude would likely be short lived.

In this week's price survey Indiana led gains, firming up into $2 handle territory, 21 cents higher on the week. North Dakota firmed 16 cents per gallon and Michigan firmed 9 cents. Missouri was alone in the downside mover camp, falling 12 cents per gallon as three states were unchanged. The long-term outlook calls for higher diesel prices by harvest with sparse opportunities during summer to book on quick price dips.

  • Distillate inventories reported by EIA firmed .08 million barrels to 152.2 mmbbl. Stocks are currently 18.6 mmbbl above the same time last year.
  • The regionwide low currently lies at $1.68 in Missouri and the Midwest high is at $2.13 in Indiana.
Farm Diesel 6/17/16
Three Weeks Ago
Previous Week
Change
Current Week
 
Iowa
$1.74
$1.74
4 cents
$1.78
Iowa
Illinois
$1.89
$1.89
1 cent
$1.90
Illinois
Indiana
$1.94
$1.87
21 cents
$2.13
Indiana
Wisconsin
$1.92
$1.92
Unchanged
$1.92
Wisconsin
Minnesota
$1.90
$1.90
2 cents
$1.92
Minnesota
South Dakota
$1.88
$1.88
Unchanged
$1.88
South Dakota
North Dakota
$1.63
$1.66
16 cents
$1.82
North Dakota
Nebraska
$1.74
$1.74
1 cent
$1.75
Nebraska
Missouri
$1.80
$1.80
-12 cents
$1.68
Missouri
Kansas
$1.60
$1.73
2 cents
$1.75
Kansas
Ohio
$1.88
$1.88
Unchanged
$1.88
Ohio
Michigan
$1.86
$1.86
9 cents
$1.95
Michigan
Midwest Average
$1.82
$1.82
4 cents
$1.86
Midwest Average

Propane

Propane -- With home heating season over, there isn't much to say about propane. As far as we can tell, infrastructure is still in solid shape and production continues at a pretty good clip. Supplies at present are ample seasonally which should keep prices in line with our expectations through the offseason and into winter 2016-17. We will be watching for the midsummer low to book for winter.

  • According to EIA, last week, national propane inventories firmed 1.057 million barrels -- now 2.309 million barrels below the same time last year at 78.351 million barrels.
  • The regionwide low is at $0.85 per gallon in Ohio and the regionwide high is in Indiana at $1.26.
LP 6/17/16
Three Weeks Ago
Previous Week
Change
Current Week
 
Iowa
$0.89
$0.89
5 cents
$0.94
Iowa
Illinois
$0.99
$0.99
Unchanged
$0.99
Illinois
Indiana
$1.17
$1.05
21 cents
$1.26
Indiana
Wisconsin
$1.10
$1.10
Unchanged
$1.10
Wisconsin
Minnesota
$0.95
$0.95
Unchanged
$0.95
Minnesota
South Dakota
$0.89
$0.89
Unchanged
$0.89
South Dakota
North Dakota
$0.89
$0.89
-9 cents
$0.80
North Dakota
Nebraska
$0.89
$0.89
Unchanged
$0.89
Nebraska
Missouri
$1.12
$1.12
Unchanged
$1.12
Missouri
Kansas
$1.08
$1.08
2 cents
$1.10
Kansas
Ohio
$0.85
$0.85
Unchanged
$0.85
Ohio
Michigan
$1.05
$1.05
5 cents
$1.10
Michigan
Midwest Average
$0.99
$0.98
2 cents
$1.00
Midwest Average

 

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