Weekly Farm Fuels Bulletin | Diesel Firms, LP Awaits Direction

Posted on 05/30/2018 12:51 PM

 

Farm Dieselfarm diesel price chart

  • Farm diesel gained 4 cents on the week.
  • Strength in WTI and heating oil futures along with other petroleum products is supportive for farm diesel.
  • Despite a softer tone in WTI crude oil futures this week, we have believed for weeks that farm diesel is undervalued and as dealers restock, prices will continue to climb.
  • But WTI's rejection of life above $70 per barrel amid robust world supplies is beginning to look like a short-term market top.
  • According to our farm diesel/heating oil futures spread, upside risk is softening for ruby red.

Propanepropane price chart

  • Propane prices softened a penny per gallon this week amid very little price movement from state to state.
  • This week's price tag at a regional average of $1.40 is well above our previous predictions, but historically, prices have moved sideways through this time period as dealers wait to confirm summertime prices, and refiners rebuild supplies.
  • We have to keep increasing propane exports in mind. Recall the accelerated pace of imports will be less seasonal than in recent years as Asian buyers are using LP for industrial purposes. That will keep a floor under retail prices here in the states.

Fuel
5/14/18
5/21/18
Week-over Change
Current Week
Fuel
Farm Diesel
$2.46
$2.48
+4 cents
$2.52
Farm Diesel
LP
$1.39
$1.41
-1 cent
$1.40
LP

Our farm diesel/heating oil futures spread compares the weekly average retail farm diesel price with front-month heating oil futures as of the close on the previous Friday. A move below the "line in the sand" indicates pending upside risk. A move above our "line in the sand" indicates downside potential.

farm diesel/heating oil spread


 

 

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