May 22, 2013
From: Carrie Gallo • Phone: 800-547-3835 • E-mail: carrie.gallo@chsinc.com
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. CHS Inc. 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. Today’s Market News
* Group 3 Gasoline: The volatile Group 3 gasoline basis that had risen to nearly 60 cents over NYMMEX is now 29 cents over. We now are seeing Chicago and Group 3 prices at comparable levels which should help level out rack prices throughout the middle of the country. Group markets are being resupplied with gasoline but yesterday’s API inventory report still showed a PADD 2 (Midwest) draw of 477,000 bbls.
* Brent Crude: The spread between WTI crude oil and Brent crude narrowed to its lowest in a week at $7.62 a barrel. The tightening in the spread is due to an increasing ability to move U.S. fuel and oil to the Gulf and East coasts as pipeline and rail infrastructure is built out.
* Federal Reserve: Investors are focusing on the release of minutes of the Fed’s last meeting and testimony by Fed Chairman Ben Bernanke to Congress, both are scheduled for today. The market is waiting to see what is going to happen and if there is a change, how quickly with the change might occur.
* Inventory: A bearish API report said that U.S. crude stocks increased 532,000 barrels last week, gasoline stockpiles rose 3 million barrels and distillate supplies climbed 459,000 barrels while utilization dropped 1.5 percent to 86.8 percent. Bloomberg is expecting today’s inventory report to reflect an 800,000 barrel crude draw, a 550,000 barrel gasoline draw, a 1 million barrel distillate build. Refinery rates are expected to increase to 88.4 percent, up 0.4 points from last prior week and the highest rate in 4 months.
Comments: Crude and products are lower this morning on a bearish API report ahead of this morning’s DOE report. The market should also react to Federal Reserve comments on U.S. monetary policy.
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