Crude prices gained momentum this week on demand increases and economies across the globe reopening. WTI clawed back to almost the mid $30’s before cooling off yesterday on increased refinery runs due to refining margins returning. The big news is the possible change in tone on our trade relationship with China. Crude markets are worried that increased sanctions and derailment of trade talks in China will slow the recovery from the coronavirus pandemic. In the US, appetite for gasoline is starting to recover but inventory levels are rising. The relationship is delicate because if demand slips at all in the next three months, we could be right back where we started with a very oversupplied market. I still believe we are well over a year away from seeing the crude and refined markets balance out.
In local news, demand has clawed back over 30% what was lost in April. Summer weather and reopening of the economy are bringing people back to their cars. Cost of gasoline and diesel have recovered some loses as well, but I expect to see gasoline and diesel retail prices remain below $2/gallon for the next month.
Propane future pricing continues to rise based on lackluster demand, decreased production, and increased exports. Although the alarm bells are not ringing yet, i don’t expect to see propane prices fall. Summer fill season is in full swing. I am recommending that everyone fill their tanks in the next month to be safe. Next season’s contracts should be released towards the end of June.
As always, if you have any questions, comments, or concerns, please feel free to reach out.