Gasoline inventories are so low that any actions by refiners is not likely to help prices. However, any increase in production by OPEC will still take up to six weeks to reach to reach the U.S. Nitrogen fertilizer prices can also be affected by the increase in oil prices because natural gas is a key component of nitrogen fertilizer production. Fortunately, nitrogen fertilizer prices have not increased nearly as much as fuel prices. Nitrogen fertilizer is so far up only three percent from last February. Low crop prices and reduced corn and wheat acres, along with some early-season weather problems, contributed to a five percent decline in fertilizer usage from a year ago.
Supplies are apparently adequate as current low crop prices discourage any increases in consumption.
However, we have probably seen the low for nitrogen fertilizer prices for the year. Farmers can probably expect to see nitrogen prices rise as higher oil prices start to impact the cost of fertilizer. Farmers looking to purchase fuel and fertilizer should probably do so as soon as they can. Prices will probably not get any lower in the near term. Fuel prices could remain high for most of the summer while nitrogen fertilizer prices could rise throughout the year.