Well, the fear of Trump leaving the Iran deal and issuing sanctions became a reality this Tuesday. The fear of crude supply constraint, further Middle East tensions between Iran, Israel, and Saudi Arabia, and a potential for future war sent crude oil and refined product prices through the roof. Many analysts believe we might have at least $3-7/barrel more to go which would well push our retail price of gasoline over $3/gallon. I wish I had some good news to share or some optimism in regards to the coming weeks, but I do not. Expect prices to increase from where they are at until at least the OPEC meeting in the middle of June. By the time OPEC meets, we should have some understanding on the upcoming sanctions and their potential affects on the markets. For now, get ready to spend a lot more money at the pump for the summer.
Retail prices of gasoline and diesel continue to rise. I expect to see gasoline prices near $3/gallon in the coming weeks and the potential for diesel fuel to approach $3.50/gallon. These prices come at the biggest demand season in our country for farming and travel.
Propane prices have surprisingly stayed calm during this storm. Prices have gone up, but not at the same percentage as gasoline or diesel. I do believe that our current retail pricing is probably going to be close to summer fill prices, and next season’s contracts will be about 15 cents/gallon more than last year. Considering that crude and refined product prices have gone up 47% in price compared to last year, the increase in propane seasonal contract price is potentially only 13%. Therefore, propane heating contracts are offering good value in comparison to other refined products. Contract prices will be released in June or early July.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.
Jon Crawford – Pres.