Farm Fuels In Focus | Crude Falls From Highs

Posted on 05/25/2018 3:02 PM

diesel price chart

  • June 2018 natural gas opened today at $2.92, up 12 cents from our last report.
  • Farm Diesel is up 2 cents on the week at an average of $2.48 per gallon.
  • July 2018 WTI crude oil opened the day at $70.65, off 80 cents from our last report.
  • June 2018 Heating oil futures opened the day at $2.26, up 4 cents from our last report.
  • Propane is up 2 cents at $1.41 per gallon regionally.

Farm Diesel -- Farm diesel was higher this week on a 14 cent rise in Nebraska as Michigan gained 4 cents and Iowa added 3 cents per gallon. Seven states were unchanged and no state posted a lower price this week.

After The Trump administration announced it would end the Iran Nuclear Deal, WTI crude oil prices surged to a long time high of $72.90 on Tuesday of this week. Prices have since been trending lower from day today, ending the week with a sharply lower price performance. At a meeting this week in St. Petersburg ahead of next months' Vienna summit, OPEC and non-OPEC producers hinted they were laying the groundwork to ease production curtailments.

This comes as U.S. rig counts continue to climb, and supplies rebuild. According to Baker Hughes, U.S. rig count rose to 859, up 15 rigs during the week ended May 25. That's the highest level since March 2015.

With some OPEC nations posting declining output -- Venezuela is the most glaring example -- Saudi Arabia and Russia are looking to increase production to fill the potential supply gap and capture marketshare.

OR... perhaps the rising U.S. rig count and rising U.S. production profit margins is something that OPEC wants to regulate with a supply side adjustment. The market is acting as watchers predicted it would. Production curtailments led to higher prices which will increase profitability, bring more rigs online and support an increase in supplies.

some are predicting a rise above $80 per barrel. At least they were last week. It will be interesting to see what becomes of the rumored production increases, and how traders respond.


  • Distillate inventories reported by EIA softened 1.0 million barrels to 114.0 mmbbl. Stocks are currently 32.3 mmbbl below the same time last year.
  • The regionwide low currently lies at $2.19 in Wisconsin. The Midwest high is at $2.67 in North Dakota.
Farm Diesel 5/25/18
Three Weeks Ago
Previous Week
Change
Current Week
 
Iowa
$2.44
$2.51
+3 cents
$2.54
Iowa
Illinois
$2.31
$2.31
Unchanged
$2.31
Illinois
Indiana
$2.50
$2.66
Unchanged
$2.66
Indiana
Ohio
$2.12
$2.26
Unchanged
$2.26
Ohio
Michigan
$2.44
$2.48
+4 cents
$2.52
Michigan
Wisconsin
$2.19
$2.19
Unchanged
$2.19
Wisconsin
Minnesota
$2.56
$2.57
+2 cents
$2.59
Minnesota
North Dakota
$2.67
$2.67
Unchanged
$2.67
North Dakota
South Dakota
$2.36
 
$2.59
 
Unchanged
 
$2.59
 
South Dakota
Nebraska
$2.44
$2.44
+14 cents
$2.58
Nebraska
Kansas
$2.43
$2.43
+1 cent
$2.44
Kansas
Missouri
$2.42
$2.42
Unchanged
$2.42
Missouri
Midwest Average
$2.41
$2.46
+2 cents
$2.48
Midwest Average

Propane -- Propane was supported by a higher price in just one state this week. Kansas added 15 cents per gallon. No other state posted a price change this week.

Propane is higher on the heels of a generally higher petroleum sector. But this week's inventory build will undoubtedly continue through the next several weeks, allowing seasonal price pressure to take over, and force prices to soften. We still expect prices to fall somewhere between $1.15 and now $1.25 at the high end, but bulk buyers will find much better prices than that, depending on which state in the Midwest they farm.


  • According to EIA, national propane inventories firmed 0.734 million barrels -- now 2.594 million barrels below the same time last year at 41.092 million barrels.
  • The regionwide low is at $1.19 per gallon in Michigan, and the regionwide high is in Indiana at $1.81.
LP 5/25/18
Three Weeks Ago
Previous Week
Change
Current Week
 
Iowa
$1.23
$1.25
Unchanged
$1.23
Iowa
Illinois
$1.43
$1.43
Unchanged
$1.43
Illinois
Indiana
$1.81
$1.81
Unchanged
$1.81
Indiana
Ohio
$1.35
$1.35
Unchanged
$1.35
Ohio
Michigan
$1.19
$1.56
-3 cents
$1.19
Michigan
Wisconsin
$1.20
$1.20
Unchanged
$1.20
Wisconsin
Minnesota
$1.30
$1.30
-31 cents
$1.30
Minnesota
North Dakota
$1.24
$1.24
-15 cents
$1.24
North Dakota
South Dakota
$1.47
 
$1.47
 
Unchanged
 
$1.47
 
South Dakota
Nebraska
$1.23
$1.23
Unchanged
$1.23
Nebraska
Kansas
$1.35
$1.53
-18 cents
 
$1.35
Kansas
Missouri
$1.57
$1.56
+4 cents
 
$1.57
Missouri
Midwest Average
$1.36
$1.39
+2 cents
$1.41
Midwest Average

spread chart

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