(515) 309-9570 Toll Free
2829 Westown Parkway | Suite 350 | West Des Moines, IA 50266 Phone (515) 225-1334 | Fax (515) 225-8511 | Web www.heartlandcoop.com Market Outlook:
Market seems to be consolidating again after 2 weeks of fairly consistent down days. Best recommendation is continue watching for a bottom to be put in place. Analysts are of the opinion that supply and demand are still not balanced which will cause the market to continue the down trend. Market News: Crude, Gasoline and Distillate:
The market is in a condition of contango. Contango refers to a situation where the future cash price is below the current futures market price, and people are willing to pay more for a commodity at some point in the future than the actual expected price of the commodity. This may be due to people's desire to pay a premium to have the commodity in the future rather than paying the costs of storage and carry costs of buying the commodity today. Example: assume an investor goes long a futures contract today at $100. The contract is due in one year. If the expected future spot price is $70, the market is in contango, and the futures price will have to fall (unless the future spot price changes) to converge with the expected future spot price.i
While U.S. drilling activity has slowed down in response to the price plunge, it will take months for that to translate into lower supplies, according to Societe Generale’s Wittner. Rigs seeking oil in the U.S. decreased by 61 to 1,421, Baker Hughes Inc. said Jan. 9. That’s the largest drop since February 1991.ii
The (Bloomberg) CHART OF THE DAY shows how West Texas Intermediate, the U.S. oil benchmark, tumbled 69 percent from $31.82 a barrel in November 1985 to $9.75 in April 1986 when Saudi Arabia, tiring of cutting output to support prices, flooded the market. Prices didn’t claw back the losses until 1990. Oil has dropped 57 percent since June and OPEC members say they’re willing to let prices sink further.iii
Saudi billionaire businessman Prince Alwaleed bin Talal says, “We will not see $100-a-barrel oil again.”iv
The trend in economic news this week asks how bad is the economy if the price of oil continues lower. Demand for petroleum products should have increased more than it has considering a $0.70 per gallon drop in regular unleaded gasoline since the beginning of December. Lack luster demand points out a fact that so many government reports seem to miss. This economy is not rebounding.
Is this (the picture below) why there is such a national push to raise the minimum wage? Maybe the wrong income source is being scrutinzed.
U.S. stocks dropped on Wednesday, putting equities on pace for their fourth straight losing session as a World Bank forecast sparked concerns about weak economies and U.S. retail sales for December missed expectations.v
North Dakota, which has been a high-inbound state for the last several years because of the huge growth in the energy sector, as shale oil production has dramatically increased. But in the last few months of 2014, falling oil prices have meant a much dimmer jobs picture and people have already started leaving, says Stoll, who predicts further out-migration there and in other energy-producing states like Oklahoma.vi
In a stunning Tuesday report, Gallup CEO and Chairman Jim Clifton revealed that “for the first time in 35 years, American business deaths now outnumber business births.”vii
Economy:
Jeff Honkomp Petroleum Sales and Marketing Office: Heartland Coop Fax: Email: [email protected]
(515) 309-9570 (515) 225-8511
Toll Free: (800) 513-3938 Cell: (515) 330-5286
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. Heartland Coop, 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.
2829 Westown Parkway | Suite 350 | West Des Moines, IA 50266 Phone (515) 225-1334 | Fax (515) 225-8511 | Web www.heartlandcoop.com Ethanol: Ethanol production for the week ending January 9 averaged 978 thousand barrels per day. This is up 3.06% vs. last week and up 12.67% vs. last year. Total Ethanol production for the week was 6.846 million barrels. Stocks as of January 9 were 20.229 million barrels. This is up 7.34% vs. last week and up 25.82% vs. last year. Corn used in last week's production is estimated at 102.69 million bushels. This crop year's cumulative corn used for ethanol production for this crop year is 1.75 billion bushels. Corn use needs to average 99.446million bushels per week to meet this crop year's USDA estimate of 5.175billion bushels.
Summary of Weekly Petroleum Data for the Week Ending January 9, 2015 U.S. crude oil refinery inputs averaged 15.9 million barrels per day during the week ending January 9, 2015, 527,000 barrels per day less than the previous week’s average. Refineries operated at 91.0% of their operable capacity last week. Gasoline production increased last week, averaging over 9.1 million barrels per day. Distillate fuel production decreased last week, averaging 5.1 million barrels per day. U.S. crude oil imports averaged 7.5 million barrels per day last week, up by 636,000 barrels per day from the previous week. Over the last four weeks, crude oil imports averaged over 7.4 million barrels per day, 0.6% below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 512,000 barrels per day. Distillate fuel imports averaged 232,000 barrels per day last week. U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 5.4 million barrels from the previous week. At 387.8 million barrels, U.S. crude oil inventories are at the highest level for this time of year in at least the last 80 years. Total motor gasoline inventories increased by 3.2 million barrels last week, and are well above the upper limit of the average range. Finished gasoline inventories decreased while blending components inventories increased last week. Distillate fuel inventories increased by 2.9 million barrels last week but are in the lower half of the average range for this time of year. Propane/propylene inventories fell 0.8 million barrels last week but are well above the upper limit of the average range. Total commercial petroleum inventories increased by 10.2 million barrels last week. Total products supplied over the last four-week period averaged 19.9 million barrels per day, up by 3.9% from the same period last year. Over the last four weeks, motor gasoline product supplied averaged 9.2 million barrels per day, up by 7.1% from the same period last year. Distillate fuel product supplied averaged over 3.8 million barrels per day over the last four weeks, up by 7.8% from the same period last year. Jet fuel product supplied is up 2.7% compared to the same four-week period last year.
http://www.investopedia.com/terms/c/contango.asp http://www.bloomberg.com/news/2015-01-14/oil-at-40-and-below-gaining-traction-on-wall-street.html http://www.bloomberg.com/news/2015-01-13/oil-s-1986-collapse-signals-rebound-years-away-chart-of-the-day.html iv http://www.foxbusiness.com/markets/2015/01/12/saudi-prince-100-barrel-oil-never-again/?intcmp=ob_homepage_dont_miss&intcmp=obnetwork v http://www.reuters.com/article/2015/01/14/us-markets-stocks-usa-idUSKBN0KN1C920150114 vi http://www.forbes.com/sites/susanadams/2015/01/13/the-states-people-are-fleeing/ vii http://www.breitbart.com/big-government/2015/01/14/economic-death-spiral-more-american-businesses-dying-than-starting/ i
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Jeff Honkomp Petroleum Sales and Marketing Office: Heartland Coop Fax: Email: [email protected]
(515) 309-9570 (515) 225-8511
Toll Free: (800) 513-3938 Cell: (515) 330-5286
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. Heartland Coop, 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.
Market seems to be consolidating again after 2 weeks of fairly consistent down days. Best recommendation is continue watching for a bottom to be put in place. Analysts are of the opinion that supply and demand are still not balanced which will cause the market to continue the down trend. Market News: Crude, Gasoline and Distillate:
The market is in a condition of contango. Contango refers to a situation where the future cash price is below the current futures market price, and people are willing to pay more for a commodity at some point in the future than the actual expected price of the commodity. This may be due to people's desire to pay a premium to have the commodity in the future rather than paying the costs of storage and carry costs of buying the commodity today. Example: assume an investor goes long a futures contract today at $100. The contract is due in one year. If the expected future spot price is $70, the market is in contango, and the futures price will have to fall (unless the future spot price changes) to converge with the expected future spot price.i
While U.S. drilling activity has slowed down in response to the price plunge, it will take months for that to translate into lower supplies, according to Societe Generale’s Wittner. Rigs seeking oil in the U.S. decreased by 61 to 1,421, Baker Hughes Inc. said Jan. 9. That’s the largest drop since February 1991.ii
The (Bloomberg) CHART OF THE DAY shows how West Texas Intermediate, the U.S. oil benchmark, tumbled 69 percent from $31.82 a barrel in November 1985 to $9.75 in April 1986 when Saudi Arabia, tiring of cutting output to support prices, flooded the market. Prices didn’t claw back the losses until 1990. Oil has dropped 57 percent since June and OPEC members say they’re willing to let prices sink further.iii
Saudi billionaire businessman Prince Alwaleed bin Talal says, “We will not see $100-a-barrel oil again.”iv
The trend in economic news this week asks how bad is the economy if the price of oil continues lower. Demand for petroleum products should have increased more than it has considering a $0.70 per gallon drop in regular unleaded gasoline since the beginning of December. Lack luster demand points out a fact that so many government reports seem to miss. This economy is not rebounding.
Is this (the picture below) why there is such a national push to raise the minimum wage? Maybe the wrong income source is being scrutinzed.
U.S. stocks dropped on Wednesday, putting equities on pace for their fourth straight losing session as a World Bank forecast sparked concerns about weak economies and U.S. retail sales for December missed expectations.v
North Dakota, which has been a high-inbound state for the last several years because of the huge growth in the energy sector, as shale oil production has dramatically increased. But in the last few months of 2014, falling oil prices have meant a much dimmer jobs picture and people have already started leaving, says Stoll, who predicts further out-migration there and in other energy-producing states like Oklahoma.vi
In a stunning Tuesday report, Gallup CEO and Chairman Jim Clifton revealed that “for the first time in 35 years, American business deaths now outnumber business births.”vii
Economy:
Jeff Honkomp Petroleum Sales and Marketing Office: Heartland Coop Fax: Email: [email protected]
(515) 309-9570 (515) 225-8511
Toll Free: (800) 513-3938 Cell: (515) 330-5286
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. Heartland Coop, 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.
2829 Westown Parkway | Suite 350 | West Des Moines, IA 50266 Phone (515) 225-1334 | Fax (515) 225-8511 | Web www.heartlandcoop.com Ethanol: Ethanol production for the week ending January 9 averaged 978 thousand barrels per day. This is up 3.06% vs. last week and up 12.67% vs. last year. Total Ethanol production for the week was 6.846 million barrels. Stocks as of January 9 were 20.229 million barrels. This is up 7.34% vs. last week and up 25.82% vs. last year. Corn used in last week's production is estimated at 102.69 million bushels. This crop year's cumulative corn used for ethanol production for this crop year is 1.75 billion bushels. Corn use needs to average 99.446million bushels per week to meet this crop year's USDA estimate of 5.175billion bushels.
Summary of Weekly Petroleum Data for the Week Ending January 9, 2015 U.S. crude oil refinery inputs averaged 15.9 million barrels per day during the week ending January 9, 2015, 527,000 barrels per day less than the previous week’s average. Refineries operated at 91.0% of their operable capacity last week. Gasoline production increased last week, averaging over 9.1 million barrels per day. Distillate fuel production decreased last week, averaging 5.1 million barrels per day. U.S. crude oil imports averaged 7.5 million barrels per day last week, up by 636,000 barrels per day from the previous week. Over the last four weeks, crude oil imports averaged over 7.4 million barrels per day, 0.6% below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 512,000 barrels per day. Distillate fuel imports averaged 232,000 barrels per day last week. U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 5.4 million barrels from the previous week. At 387.8 million barrels, U.S. crude oil inventories are at the highest level for this time of year in at least the last 80 years. Total motor gasoline inventories increased by 3.2 million barrels last week, and are well above the upper limit of the average range. Finished gasoline inventories decreased while blending components inventories increased last week. Distillate fuel inventories increased by 2.9 million barrels last week but are in the lower half of the average range for this time of year. Propane/propylene inventories fell 0.8 million barrels last week but are well above the upper limit of the average range. Total commercial petroleum inventories increased by 10.2 million barrels last week. Total products supplied over the last four-week period averaged 19.9 million barrels per day, up by 3.9% from the same period last year. Over the last four weeks, motor gasoline product supplied averaged 9.2 million barrels per day, up by 7.1% from the same period last year. Distillate fuel product supplied averaged over 3.8 million barrels per day over the last four weeks, up by 7.8% from the same period last year. Jet fuel product supplied is up 2.7% compared to the same four-week period last year.
http://www.investopedia.com/terms/c/contango.asp http://www.bloomberg.com/news/2015-01-14/oil-at-40-and-below-gaining-traction-on-wall-street.html http://www.bloomberg.com/news/2015-01-13/oil-s-1986-collapse-signals-rebound-years-away-chart-of-the-day.html iv http://www.foxbusiness.com/markets/2015/01/12/saudi-prince-100-barrel-oil-never-again/?intcmp=ob_homepage_dont_miss&intcmp=obnetwork v http://www.reuters.com/article/2015/01/14/us-markets-stocks-usa-idUSKBN0KN1C920150114 vi http://www.forbes.com/sites/susanadams/2015/01/13/the-states-people-are-fleeing/ vii http://www.breitbart.com/big-government/2015/01/14/economic-death-spiral-more-american-businesses-dying-than-starting/ i
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Jeff Honkomp Petroleum Sales and Marketing Office: Heartland Coop Fax: Email: [email protected]
(515) 309-9570 (515) 225-8511
Toll Free: (800) 513-3938 Cell: (515) 330-5286
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. Heartland Coop, 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.
