Crude oil prices continue to slide this week. WTI crude touched $66/barrel on Tuesday, closing over 11% down in the past two weeks. Traders have all rung the register and jumped on board believing that Saudi Arabia will make sure that all Iranian crude lost from sanctions will be replaced. Many feel that Saudi Arabia will deliver on the promise to help diminish consequences over the killing of a journalist. In addition to the geopolitical climate changes, the world stock markets have been in correction giving strength to a potential slowdown in the economy which is bearish for crude. I do not feel that crude prices will go much lower. I feel that at this point the hedge fund money is out of the price. When you look at the amount of contract positions sold in the past two weeks, the amount purchased in return is minimal. Therefore, traders are not selling their long positions and shorting crude. So basically, from a technical standpoint, crude prices are in a “wait and see” pattern until the hedge fund managers enter the market again.
Local prices of gasoline are inching closer to $2.49/gallon. I expect to see prices continue to fall throughout the weekend. Diesel prices have not fallen as much due to increased demand for harvest. Although harvest is going to be very prolonged this year due to the flooding and temperatures, I don’t expect to experience any diesel supply disruptions over the coming weeks.
Propane prices are slowly rising as we get into winter. The colder than normal October has increased demand. The major sell off in crude affected propane slightly, but overall, prices are continuing to trend higher.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.
Jon Crawford – Pres.