The big OPEC meeting today in Vienna did not impress traders. Hopes were for over a 1.5M barrel/day cut, and that does not look like it will happen, even when Russia weighs in tomorrow. In addition, the economic outlook is starting to look weak for the U.S. which is causing a massive sell off in the market. To top it off, China and U.S. trade tensions are high with summit talks being interpreted differently between the two countries as well as Canada arresting an executive from the Chinese firm Huawei. The traders have reacted by selling off even more crude contracts. WTI crude prices have now dropped back to their lows for the year. The bullish news being reported was a major drop in crude supplies here in the U.S., Iran threatening to block the Straight of Hormuz, and Canada offering to cut crude production to help prop up prices. For now, traders seem to think the world is entering closer to surplus on crude supplies and bearish news on the economy is winning the war of words. For now, cheap oil prices are maybe here to stay until year end. We will need to wait for Russia’s reaction as well as OPEC’s official report.
In local news, retail prices on gasoline have bottomed out near $2.19/gallon, and retail diesel prices are right around $3.00/gallon depending on the winter blending applied. I would expect to see these lower prices through Christmas. So for now, we can enjoy some lower prices for the holiday season!
Propane prices have bottomed as demand continues to climb. We officially experienced the coldest November on record. For all will-call customers, please make sure to keep an eye on your propane tank. Usage is up more than 20% this year. As a reminder, please make sure to have yoru driveway cleared and a path available to your tank throughout the winter. We appreciate all your help for making safe and efficient deliveries.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.
Jon Crawford – Pres.