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Friday, August 9, 2019x
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Farmward Energy
Weekly Update
This Week’s Market News
Market Comments: The energy markets started off Friday morning with a firmer tone. In addition, U.S. stocks are higher and the dollar lower.
The energy markets are getting a lift from talk of a possible OPEC production cuts.
The National Oceanic and Atmospheric Administration said in its mid-season outlook that an El Nino weather pattern in the Pacific Ocean has ended, leading to neutral conditions that are more favorable for tropical activity.
The group diesel rack basis estab-lished a short-term low in mid-July and has since gained some positive momentum. This year’s basis levels are running well below several of the previous years. Typically, diesel ba-sis values will continue to strengthen going into the fall months as demand from the agriculture sector ramps up. It could be an interesting fall as the crops were planted during a large time window this spring, which could result in an extended harvest this fall.
EIA expects Brent crude oil pric-es will increase to $65/b during the next several months and remain there throughout 2020. As previously dis-cussed, EIA expects this price to be relatively stable price point for the market, considering modest levels of inventory growth in 2020. However, the combination of oil supply disrup-tion risk and lower economic growth expectations in 2019 creates uncer-tainty in EIA’s crude oil price forecast. Given the uncertainty in these risk fac-tors, prices could break out of the mid-$60/b range if the supply or demand concerns materialize in the coming months.
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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Daily Crude Oil: Wednesday’s big drop in the value of WTI was able to break be-low the recent low on June 5th of $50.60 but was unable to close below that lev-el to finish out the day. Yesterday and so far this morning buyers have stepped back in to push values back up. Looking at the same retracement for crude from earlier in the week resistance comes in at the 62% level of $54.54. The biggest take-away seems to be that as far as down-side goes it appears that the $50 level will provide good support moving forward.
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.
NOAA has released their weather models forecasting the potential winter weather conditions for 2019/2020. As of right now, they are anticipating temperatures throughout the entire U.S. to be above av-erage this winter. In addition, they are only calling for above average precipitation in the southern portion of the U.S. However, we certainly know that Mother Nature sometimes makes plans of her own, so we will have to wait and see how this winter unfolds.
International Energy Agency: According to the IEA, global demand for energy for the first half of 2019 grew at its lowest level in 11 years. Major contributors were slowing of global economic growth and the impact of the continued trade war between China and the United States. Due to this the agency lowered its 2019 outlook by 100k bpd to 1.1 million bpd and its 2020 number by 50k bpd to 1.3 million bpd.
Market Opinion: Traders are continuing the buying momentum from yesterday so far this morning. I would expect markets to be stronger going into the weekend as traders look to get some coverage as the bullish headlines start to gain a bit of traction and the major focus on trade war takes a bit of a breather.
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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.
U.S. inventory levels: Yesterday’s DOE reports showed surprising builds for both crude and products. Crude broke its streak of weekly draws and showed a 2.4 million barrel increase (when 2.8 million barrel decrease was anticipated). Distillate’s build of 1.5 million barrels was 1.0 million barrels greater than an-ticipated while gasoline’s whopping 4.4 million barrel jump was very surprising considering a decrease was expected. These numbers only added to the bearishness created in the past week by escalation of U.S.-China trade war.
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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 accept 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
What a difference a year has made in the propane market. Spot market prices are hovering around the lowest of the year for both Belvieu and Conway at 41 and 36 cents. This is much lower than the 96 and 76 cents we saw at the same time last year.
Prices ran up quickly last year in August and September before topping out at almost $1.10 at Belvieu and $0.86 at Conway. Oil price has been a factor consid-ering WTI crude was $14 higher last August than it is currently.
Through July 19, propane exports have averaged 1,066,000 bpd compared to last year’s average of 835,000 bpd. The major factors impacting exports are the additional capacity of the Mariner East 2 pipe-line in Pennsylvania, and additional production and export capacity in the Gulf Coast. While exports are up, domestic demand is slightly lower this year by 90,000 bpd. This nets to an additional 141,000 bpd that are either consumed or exported when compared to last year.
According to Propane Re-sources, propane inventory builds were half of what we normally see for the month of July. Having inventory on hand of over 100 million bar-rels for fall looked very prom-ising in the spring, but with recent lackluster builds that will be a very difficult task.
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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
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Farmward Energy
Weekly Update
For any inquiries, please contact: Morgan Office...............................507.249.3196
As of 7/9/19 Price 1000 Gal 1500 GalRuby FM $2.399 $2.389 $2.379#2 Clear $2.849 $2.839 $2.829
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.
