Crude oil continues to trade sideways on a lack of hedge fund positions in the market place. Crude markets are very soft on long positions. Traders are continuing to believe that economic headwinds will deteriorate crude demand next year. The only possible bullish headlines moving crude right now are coming from OPEC saying they might consider deeper cuts next year. However, most of the talk from OPEC is just talk, so the news is only keeping a lid on crude prices, not moving them higher. As the US looks at impeachment and a trade war, England/Europe at Brexit, ceasefire between Turkey and Syria began, and China at a trade war and Hong Kong unrest, I don’t see a lot of potential out there to pop crude prices higher. For now, I expect crude to remain narrow and calm through the end of year until the OPEC meeting in December.
In local news, harvest demand finally hit the Midwest and the glut of diesel fuel out of the Chicago market started to deplete. Diesel prices jumped almost 15 cents/gallon in two days. I expect to see retail prices on diesel increase in the coming week. Gasoline prices have remained steady with crude as supply has been meeting demand.
Propane prices moved a bit higher but not much. Corn drying demand is now moving and cold temps are sticking around. I expect to see propane prices slowly move higher if the end of year stays colder than normal. However, if crude prices fall off a cliff, with how much propane is still in inventory, propane prices will be hard pressed to not move lower with crude. Time will tell.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.
Jon Crawford – Pres.