As I have been saying for sometime, WTI would begin to correct towards the end of January or in February. The correction has begun and is following the stock market. WTI prices have fallen from near $70/barrel down to $60/barrel. I believe that there is still some hedge fund money sticking around and eventually we will fall through the $60/barrel support level. The value of the dollar has been increasing which is also putting downward pressure. In addition, the U.S. crude oil inventories are starting to build just as I predicted. Across the globe, Saudi Arabia is arguing amongst themselves on where and how to release their IPO of Aramco. I believe that this will eventually cause Russia to become impatient. I think Russia was holding out on production increases as long Saudi Arabia released their IPO this spring. I guess we will wait and see. If the OPEC deal falls apart, I think you will see crude tumble down again.
In local retail news, I expect to see both gasoline and diesel prices start to drop.
Propane prices are steady and supplies are looking good for rest of winter. I am expecting prices to be lower by March. In addition, I also think we will have plenty of supplies for some good summer fill prices. And prices for next year’s contracts at this moment are looking to be close to this year’s prices. So pretty much good news all around for propane right now. More information will follow towards the end of winter.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.
Jon Crawford – Pres.