Good afternoon,
Finally nice to have more normal winter temperatures again! I hope everyone is staying safe with the crazy snow and ice storms.
Crude prices continue to trade in a narrow range based on the day’s news. One day the economy looks great, the next day it looks awful. In other words, whatever, hits the headlines in the morning drives the price for the day. Crude production is very stable worldwide. Even though sanctions on Venezuela are looking to hit the market soon, many countries have already vowed to continue to buy from Iran, so the potential for a drop in world production is limited. My main concern is diesel production and prices in the US. With sanctions against Citgo, we are putting a lot of pressure on other countries for importing heavy crude that is best refined for diesel. The US does not produce any heavy crude. In addition, our diesel inventory levels are below the 5 year average. So going into high demand seasons, if we continue to limit diesel production, we are going to see our cost of diesel rise quickly.
In local retail news, the retail price of gasoline has now moved above $2/gallon and climbing. Diesel retail prices are starting to move closer to the $3/gallon mark. I expect to see retail prices continue to rise over the coming weeks as costs have increased dramatically over the past three weeks.
Propane prices have remained stable. Although demand has been very strong, production numbers are robust. There is just not a lot of fear for inventory loss in propane for the remainder of the year. Please remember to keep your driveway clean and have a clear path to your propane tank in order to receive your delivery safely and efficiently.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.
Best regards,
Jonathan Crawford – Pres.