Good morning!
Crude prices pressed “repeat” again this week with supply and economic news driving the volatility. We started the week off with Brexit drama, Iraq announcing that they pumped more oil than they should have, and Iran saying they will breach all parts of the nuclear deal. Prices dropped hard. Then OPEC comes out after a new Saudi Oil Minister was named saying that they will do whatever is necessary to keep prices high leading into the Aramco IPO. Iraq followed saying they will behave and do better on cuts moving forward. Even Russia said they would work with the US on crude prices which is unheard of! The news cause prices to spike higher. Then on Wednesday, inventory numbers on crude levels displayed large draws coupled with strong economic data in the US causing prices to spike even higher. But then in the afternoon, Trump fired John Bolton, the biggest Hawk on Iran, and said he would consider waivers on Iranian crude exports to get them to the table for negotiation. Crude prices turned and fell off a cliff. Then on Thursday the IEA announced that world supply would probably go into major surplus in 2020, causing prices to continue the fall. And finally, today economic data on the US was strong and US/China trade relations showed movement to the positive with each country giving in a bit. The US will not enforce new trade tariffs, and China will lift the agricultural purchasing tariffs and buy soybeans. The news gave support to crude prices and stopped the fall. So WTI crude price ended where it started at about $55/barrel. What a ride the past weeks have been for crude prices and I don’t see it stopping anytime soon.
Retail prices on gasoline continue to stay very low. Prices on regular gasoline are ranging between $2.34-2.44/gallon based on major price differentials currently between suppliers. Diesel prices are also remaining very stable going into harvest season.
Propane prices are slowly starting to creep up, but nothing too scary. Propane is trading based on crude movement. We are still at historically low prices of propane with historically high volumes of inventory. We do not expect to see prices rising until October 1st when winter tariffs kick in and harvest demand starts to take shape. If you have not contracted your volume for the heating season, you can still do so. Please call our office to have your tank filled and we can prepare a contract for you.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.
Best regards,
Jon Crawford