Fuel for Thought - December 31, 2018

Good morning to all and Happy New Year. Winter came in with a bang…unfortunately. Seems to me, its been a while since we’ve had a full-blown two-day blizzard. Now that we have had one, I’m good for the season. As I’ve gotten older, I’ve discovered the only thing I like about winter is when it ends.

A quick note about the energy market. The bears are still in control. Only occasionally is there an up day. The last couple weeks I suspect the holidays and the end of the year are having some affect on the markets. With that being said, diesel prices are as low as they have been in the last year to 18 months. Now would be the time to lay in some fuel for spring, or If you’re an AFD customer, buy out your tanks. Give myself or Myron a call if you need to do something.

On another note, there will be a map of the refined fuel pipelines running across the US on the website. Keep in mind this is ONLY refined products, no crude, no natural gas. It is mind boggling. The reason I bring this up is I am asked a lot why the terminals are always short a certain product. I was curious as well, so I went to the source. My CHS rep explained it this way: They do not flip a coin to decide what product to send up the pipeline. There is a department within CHS that controls that decision. It is based on past history of what and when a certain product comes up the pipe, what the timeframe of harvest looks like for the year, and the expected weather pattern. Normally, our harvest is mostly wrapped up by the end of November. This would partially dictate that #2 fuel is shipped as a priority through October/November. Then some #1 with a return to gas. The early October snow and below average temps threw a huge monkey wrench into the planning scenario. It made harvest late and a need for #1 diesel earlier than usual when the pipeline was full of #2. Another thing to keep in mind is that our product comes from the McPherson Kansas refinery. When it leaves the refinery, it takes fourteen days to reach the Nustar terminal in Aberdeen. A lot can change in that amount of time. Also, if you study the map, you’ll notice there are only two pipelines coming this way directly North. There is not a pipeline for each product; they share the same pipe. When it arrives at a specific terminal, they have a “slop” tank that they pump the mixed product into before going to the saleable tank.

Hopefully this answers any supply questions anyone may have.

Thanks for your patronage and have a safe and Happy New Year.

Brian Beck

Transport Price Ruby Fieldmaster 7500 gal minimum

Britton Area $1.8785**
Aberdeen/Groton Area $1.8338**
Doland Area $1.8785**
Forman/Gwinner Area $1.8781**

**Please call for exact pricing as prices are subject to change at anytime without notice.


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