Farm Fuels in Focus: Diesel Continues to Retreat

Posted on 03/09/2017 10:25 AM

 

  • January 2016 natural gas opened today at $2.94 -- up 18 cents from our last Fuels in Focus.
  • Farm Diesel is down 2 cents on the week at an average of $1.86 per gallon.
  • January 2016 WTI crude oil opened the day at $47.94 -- up $2.57 from our last report.
  • December 2016 Heating oil futures opened the day at $1.52 -- up 9 cents from our last report.
  • Propane is up 4 cents on the week to an average of $1.12 per gallon regionally.

Farm Diesel -- All twelve of the states in our weekly survey posted lower prices this week with seven unchanged. North Dakota led declines falling 13 cents per gallon as Indiana and Minnesota each fell a nickel with Michigan down 3 cents and Nebraska falling 2.

InputsMonitor.com"Our farm diesel outlook is unchanged and the declines we had expected around Christmas are beginning to show up. We will be looking for opportunities to top off winter supplies and book a portion for spring in the next few weeks.

OPEC finally came to an agreement to cut overall production to 32.5 million barrels per day. This is still a high production figure and was based on benchmarks set in October 2016 at record levels. The idea is to rebalance bulging world stocks of crude oil and raise futures prices. Russia even agreed to make some cuts although industry watchers are skeptical those cuts will actually be made. The other complicating factor is that higher prices will bring stalled U.S. production back online. I dive into greater detail in today's blog "OPEC Pens Production Agreement," click here to read my post.

  • Distillate inventories reported by EIA firmed 5.0 million barrels to 154.2 mmbbl. Stocks are currently 9.8 mmbbl above the same time last year.
  • The regionwide low currently lies at $1.75 in Kansas and the Midwest high is at $1.96 in Indiana.
Farm Diesel 12/2/16
Three Weeks Ago
Previous Week
Change
Current Week
 
Iowa
$1.90
$1.86
Unchanged
$1.86 Iowa
Illinois
$1.94
$1.94
Unchanged
$1.94 Illinois
Indiana
$2.01
$2.01
-5 cents
$1.96 Indiana
Wisconsin
$1.92
$1.92
Unchanged
$1.92 Wisconsin
Minnesota
$2.00
$1.96
-5 cents
$1.91 Minnesota
South Dakota
$1.79
$1.79
Unchanged
$1.79 South Dakota
North Dakota
$2.00
$1.97
-13 cents
$1.84 North Dakota
Nebraska
$1.80
$1.80
-2 cents
$1.78 Nebraska
Missouri
$1.91
$1.91
Unchanged
$1.91 Missouri
Kansas
$1.86
$1.75
Unchanged
$1.75 Kansas
Ohio
$1.81
$1.81
Unchanged
$1.81 Ohio
Michigan
$1.89
$1.84
-3 cents
$1.81 Michigan
Midwest Average
$1.90
$1.88
-2 cents
$1.86 Midwest Average

 

InputsMonitor.comPropane -- LP was the other side of the coin with only Nebraska softening, down a penny per gallon on the week. Six of twelve states were unchanged as Indiana led gains firming a whopping 30 cents per gallon. Missouri added 7 cents as Iowa and Illinois each added 2 cents per gallon.

You should be in very good shape on propane for home heating at this point and for many Midwesterners, its a good thing. Weather forecasters are calling for some major winter weather events to impact the Northern and Central United States about midweek next week. A blizzard will only encourage higher LP prices, which will eventually retreat. Current price strength may be related to customers coming in late to finally finish topping off for home heat. The extraordinary price hike in Indiana will likely retrace back down to levels that better reflect the rest of the Midwest.

  • According to EIA, last week, national propane inventories softened 1.868 million barrels -- now 3.303 million barrels below the same time last year at 100.800 million barrels.
  • The regionwide low is at $0.95 per gallon in The Dakotas and the regionwide high is in Indiana at $1.55.
LP 12/2/16
Three Weeks Ago
Previous Week
Change
Current Week
 
Iowa
$0.97
$0.97
2 cents
$0.99 Iowa
Illinois
$1.20
$1.20
2 cents
$1.22 Illinois
Indiana
$1.25
$1.25
30 cents
$1.55 Indiana
Wisconsin
$1.15
$1.15
Unchanged
$1.15 Wisconsin
Minnesota
$1.08
$1.06
Unchanged
$1.06 Minnesota
South Dakota
$0.95
$0.95
Unchanged
$0.95 South Dakota
North Dakota
$0.95
$0.95
Unchanged
$0.95 North Dakota
Nebraska
$0.97
$0.97
-1 cent
$0.96 Nebraska
Missouri
$1.08
$1.08
7 cents
$1.15 Missouri
Kansas
$1.07
$1.07
1 cent
$1.08 Kansas
Ohio
$1.10
$1.10
Unchanged
$1.10 Ohio
Michigan
$1.25
$1.25
Unchanged
$1.25 Michigan
Midwest Average
$1.09
$1.08
4 cents
$1.12 Midwest Average

 

InputsMonitor.com


 

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