Almost Back Below $60

Good morning,

Not too much to report this week. WTI crude oil is dancing with breaking back down below $60/barrel. A stronger dollar and continued increases in crude production and products in the U.S. is putting pressure on prices. Although OPEC is really pushing the success of their agreed upon agenda, I am skeptical the agreement will hold for the rest of the year. The good news is that if we continue on this path, we will have descent retail prices across the country for the year which is good for the economy. I think that we are back in a pattern where any bit of news is going to push us either to $59/barrel or $64/barrel on WTI. So until anything drastically changes, we are going to dance back and forth for a while.

In local news, we are seeing diesel prices starting to fall with the price of crude as well as major winter blending components coming out of the market. Gasoline prices are holding a bit steady with a small concern on supply going into spring with refinery maintenance. I don’t see any major price spikes in gasoline ahead, just not as big of a drop as expected in relation to crude.

Propane prices are continuing to drop with the winter starting to wind down and major deep freezes behind us. I expect contract prices and board prices to even up by the middle of April. As far as next year goes, we are seeing prices for next winter being very good in comparison to this year. Contract information and summer fill prices will be released sometime after June. More to come.

As always, if you have any questions, comments, or concerns, please feel free to give us a call.

Best regards,

Jon Crawford – Pres.

March Correction Has Begun

Good morning,

As I stated before, I believed the claw back on crude was too quick and would correct at some point in March. Well, we are at March 2nd and WTI is close to breaking back below $60/barrel! As I like to say, what a difference a week makes! Oil production is continuing to rise and stocks are building again in the U.S. going into the spring maintenance season. OPEC is getting wavy on commitments due to the U.S. has Russia in their sights to overtake on production. Also, our dollar is finally gaining back some strength from the recent sell off a couple weeks back. And just like that, crude prices fall $4/barrel. I don’t think we are out of the woods yet. Crude might tumble a bit more, but I feel that crude will trade in the $55-$60/barrel average range for maybe the year if all components stay constant.

In local retail news, I am suggesting that all farmers lock in some portion of fall fuel needs at this time. We have some excellent prices and I believe one should hedge the supply crunch that always occurs in October and November due to the harvest and refinery maintenance. Gasoline retail prices will remain somewhat in the current range due to the change in RVP for summer. This change adds a premium cost to gasoline. As the temperatures rise and costs of product fall, I expect to see diesel prices at the pump come down a little bit. Most of this will be from retailers no longer having to blend products with #1 diesel to meet winter usage needs.

Propane prices are falling off as predicted. We are not locking in next season contracts for customers yet, but the numbers are looking very good for next heating season in comparison to this year. We suggest that all customers fill their tanks this summer and lock in prices when available this summer. More information will available in the coming months.

As always, if you have any questions, comments, or concerns, please feel free to give us a call.

Best regards,

Jon Crawford – Pres.