I’m sorry to bring bad news on prices going into the weekend. Prices are continuing to dramatically climb due to a rise in crude oil prices. The rise is being blamed on upcoming Iran sanctions going into affect the first week in November which has the potential to cause a global deficit in crude supplies. In addition, there are major issues with refinery and pipeline maintenance in the Midwest. Prices for diesel and gasoline are in a 15 cent spread at most terminals throughout the state. In addition, the only pipeline bringing product into Madison will be down for 10 days in October. I expect to see retail prices at the pump continue to climb for both gasoline and diesel. The high prices will remain until the maintenance season is over in mid-October.
The timing is awful with farmers starting to harvest. If demand picks up we could see differential price blow outs push this dramatically higher. The cold temps are also ticking up propane demand which is set for a price jump as well.
Unless crude oil drops $5-10/barrel, I would expect to see current prices on all refined products to stay high for another 3-4 weeks.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.
Jon Crawford – Pres.