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Thursday, June 21, 2019x
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Farmward Energy
Weekly Update
This Week’s Market News
Market Comments: President Trump ordered a pre-dawn limited air strike against Iran but called off the operation at the last minute when informed that the three strikes would likely have a death toll of 150 people. Oil prices are still on the rise due to tension with Iran over their Revolutionary Guard shooting down a U.S. surveillance drone yesterday morning- a direct and unprovoked attack. The drone with a wingspan larger than a Boeing 737 jetliner and a cost of more than $100 million was shot down with a surface-to-air missile while over international waters. Trump said yesterday that he thought the downing of the drone was a mistake, but Iran says it was not. They maintain that the drone was in their airspace.
The flow of petroleum products through the Strait of Hormuz averages about 21 million barrels/day. Any supply delays usually result in higher oil prices. There are only three pipelines that bypass the strait. The East-West Pipeline owned by Saudi Arabia that was heavily sabotaged in May along with damage to four tankers. Saudi also owns a natural gas liquids pipeline, and the other crude oil pipeline is owned by the United Arab Emirates. The two crude pipelines move about 6.5 million barrels/day and give the two countries less exposure to the strait.
Philadelphia Energy Solutions (PES) refinery near Philadelphia had a large fire and three explosions at 4 am this morning in an alkylation unit, believed to be mostly propane. The fire has been contained but is
not yet under control. There were four employees with minor injuries, and no one is missing. Several ex-plosions were felt in South Jersey and Delaware County, PA. This refinery is the 10th largest U.S. refinery at 335,000 barrels/day and the largest on the Eastern seaboard.
Propane production set a new high record last week at 2.175 million barrels/day. Propane exports continue to stay above the million bar-rel/day mark- for the 13th consecutive week, after a slow start to the year. It is thought that future propane exports from the U.S. might be helped by the tension in the Gulf Oman that makes exports from the Middle East less at-tractive to buyers.
This communication may contain confidential and/or proprietary information and is intended only for the use of the individual or entity to which it is addressed. If the reader of this communication is not the intended recipient, you are hereby notified that any unauthorized dissemination, distribution, and/or use of this communication is strictly prohibited. The information contained herein is accurate to the best of our knowledge and belief. This report and any views expressed herein are provided for information purposes only and should not be construed in any way as an inducement to buy or sell. Farmward Cooperative does not ac-cept any liability for any loss or damage howsoever caused to anyone trading in reliance upon such information. Any prices indicated are subject to change with market conditions.
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Refineries are finally run-ning closer to a normal lev-el for this time of year, af-ter a sluggish turnaroundseason that was beset with unexpected difficul-ties, flooding and power outages.
This communication may contain confidential and/or proprietary information and is intended only for the use of the individual or entity to which it is addressed. If the reader of this communication is not the intended recipient, you are hereby notified that any unauthorized dissemination, distribution, and/or use of this communication is strictly prohibited. The information contained herein is accurate to the best of our knowledge and belief. This report and any views expressed herein are provided for information purposes only and should not be construed in any way as an inducement to buy or sell. Farmward Cooperative does not ac-cept any liability for any loss or damage howsoever caused to anyone trading in reliance upon such information. Any prices indicated are subject to change with market conditions.
Refinery fire in Philadelphia: A major explosion occurred at an alkylation unit at the Philadelphia En-ergy Solutions refinery early today. A refinery working stated that this was the worst they had seen and in-dicated there was possibly two explosions. The Girard Point section of the 335,000 barrel-per-day refinery had another fire on June 10th, where 50k bpd were impacted. Police have closed roadways surrounding the refining complex and no significant injuries have been reported.
Brent Crude & global tension: Tensions between the United States and Iran have allowed Brent crude oil to rally above $65 per barrel and is setting up to gain nearly 6% this week. After Iran shot down a U.S. drone, President Trump approved airstrikes in retaliation however recalled the strikes later. Iran is not keen on talks currently and warns of consequences on any retaliatory actions.
Market Opinion: The complex is running higher this morning as news of US strikes against Iran were called off despite increased tensions. Prices are also being supported by the bullish inventory report. Look for the market to continue is move higher as the U.S. and Iran conflict continues to be the focus.
WTI Crude Oil (Daily): For the first half of June, WTI crude oil was trading side-ways, looking for direction. Recent tensions between the U.S. and Iran and a bullish in-ventory report have given WTI the boost to leave that sideways pattern and turn bull-ish. Recent WTI broke through its resistance level of $54.34 and pushed through its then new resistance of $57.23. 50,100- & 200-day moving averages are converging as crude attempts to keep is bullish momentum.
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Weekly Update
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This communication may contain confidential and/or proprietary information and is intended only for the use of the individual or entity to which it is addressed. If the reader of this communication is not the intended recipient, you are hereby notified that any unauthorized dissemination, distribution, and/or use of this communication is strictly prohibited. The information contained herein is accurate to the best of our knowledge and belief. This report and any views expressed herein are provided for information purposes only and should not be construed in any way as an inducement to buy or sell. Farmward Cooperative does not ac-cept any liability for any loss or damage howsoever caused to anyone trading in reliance upon such information. Any prices indicated are subject to change with market conditions.
Heating Oil (Daily): For the past sev-eral weeks diesel has been trading rela-tively sideways as it looks for a breakout. Today’s news of military conflict has it breaking out above its most recent resis-tance level of 1.8354 and looks to poten-tially test 1.8932. if heating oil can hold its poise, its looking to cross over a pivotal mark on the Gann Fan analysis, changing from its position from a bearish market to a bullish market. The 14 day RSI is gaining strength, however is still on the weaker side.
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Weekly Update
This communication may contain confidential and/or proprietary information and is intended only for the use of the individual or entity to which it is addressed. If the reader of this communication is not the intended recipient, you are hereby notified that any unauthorized dissemination, distribution, and/or use of this communication is strictly prohibited. The information contained herein is accurate to the best of our knowledge and belief. This report and any views expressed herein are provided for information purposes only and should not be construed in any way as an inducement to buy or sell. Farmward Cooperative does not ac-cept any liability for any loss or damage howsoever caused to anyone trading in reliance upon such information. Any prices indicated are subject to change with market conditions.
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Farmward Energy
Weekly Update
Propane News: The chart below shows the continued increase in the U.S. Propane Production. The U.S. is now producing 2.1 million barrels vs. 1.9 million barrels / day last year at this same time. If exports continue to hit 1.2 million barrels / day, the Total weekly EIA’s supply builds should start to level out at 2 million barrels per week. If the EIA continues to report 3+ million barrels weekly, we will hit 104 million barrels ( the highest recorded U.S. Inventory) by October 1st.
The table to the left shows U.S. propane builds from winter seasonal lows through the first week of June. The low prices of early 2016 played out to higher prices through 2017 and 2018 as these two years were below the 5-year average for propane builds. The above average builds for propane we are seeing so far in 2019 plus larger crude builds has played a part in the drop in prices for both products.
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Weekly Update
This communication may contain confidential and/or proprietary information and is intended only for the use of the individual or entity to which it is addressed. If the reader of this communication is not the intended recipient, you are hereby notified that any unauthorized dissemination, distribution, and/or use of this communication is strictly prohibited. The information contained herein is accurate to the best of our knowledge and belief. This report and any views expressed herein are provided for information purposes only and should not be construed in any way as an inducement to buy or sell. Farmward Cooperative does not ac-cept any liability for any loss or damage howsoever caused to anyone trading in reliance upon such information. Any prices indicated are subject to change with market conditions.
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Farmward Energy
Weekly Update
For any inquiries, please contact: Morgan Office...............................507.249.3196
As of 6/12/19 Price 1000 Gal 1500 GalRuby FM $2.359 $2.349 $2.339#2 Clear $2.799 $2.789 $2.779
PricePropane Ag/Comm $1.05 Summer FillPropane Home Heat $1.05 Summer Fill
Pat MachtEnergy Manager
Office: 507.249.3196Cell: 507.430.2233
Curty MeyersEnergy Sales Specialist
Office: 507.249.3196Cell: 507.430.1884
Travis WendtEnergy Sales Specialist
Office: 507.249.3196Cell: 507.227.7119
This communication may contain confidential and/or proprietary information and is intended only for the use of the individual or entity to which it is addressed. If the reader of this communication is not the intended recipient, you are hereby notified that any unauthorized dissemination, distribution, and/or use of this communication is strictly prohibited. The information contained herein is accurate to the best of our knowledge and belief. This report and any views expressed herein are provided for information purposes only and should not be construed in any way as an inducement to buy or sell. Farmward Cooperative does not ac-cept any liability for any loss or damage howsoever caused to anyone trading in reliance upon such information. Any prices indicated are subject to change with market conditions.
