Good morning,
It’s been a wild ride this week again for crude oil prices. This past week we had Secretary of the Treasury announce that waivers will be granted to countries who might need waivers on Iranian crude purchases. The decision contradicts the hardline stance taken by Trump a month ago when he left the Iran deal. The news caused prices to tumble. The EIA announced that crude supplies increased last week, but the news was overshadowed by news that Saudi Arabia and Russia held a quick conference call outside of the OPEC parameters to not increase production as quickly as the market is anticipating. And then yesterday Saudi Arabia announced that exports were going to drop a bit in August. All this back and forth is carving out a price around $70/barrel for WTI. The next floor for WTI is $64/barrel and I’m just not sure we are going to see that happen. I am still long on crude since I changed my position a month ago. I believe that we are in a temporary dip. As earnings come out, all energy companies continue to pull back on investment for exploration. The potential for crude to really break out in price next year is looking stronger. The only events that would really push crude down big would be the collapse of a stock market or slowing of a major economy.
Retail prices in gasoline and diesel fuel continue to slowly ease. I expect prices to hold at current levels and maybe decrease a little, but not much. If you are planning on taking a trip yet this summer, I would use today’s gasoline price as an average.
Propane prices have started to increase as inventory levels are not building as quickly as we would like going into winter. Please make sure to get your propane tank filled this summer. We are at the lowest price of the year. Also, we highly recommend that you contract for propane next year. I am very bullish on propane prices for this coming winter.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.
Best regards,
Jon Crawford