Crude prices continue climb causing gasoline and diesel prices to rise. We are seeing WTI crude carve out a recent floor at around $55/barrel. I’m not expecting that to change much until after the China/US summit in March. For now, it’s a continuation of “wait and see” what the news throws out each day. The FED is starting to look dovish again which is putting some downward pressure on crude price, coupled with continued increases in crude production in the US. But Saudi Arabia cuts and sanctions against Venezuela and Iran are keeping the downward momentum in check. At the moment, hedge funds have reentered the market with longer positions on crude adding to the temporary floor on WTI. So far now, I expect WTI to continue its’ narrow trade range.
Local markets are continuing to see rising retail prices on gasoline and diesel, and I expect to see the trend continue. Gasoline prices are well on their way to over $2.29/gallon and diesel prices at over $3.00/gallon are starting to pop up. I don’t see these prices going away anytime soon. For now, it’s wait and see until the end of March.
Propane prices are continuing to hold steady with increases in supplies. Production is at record levels and currently we are 11M barrels ahead of inventory levels compared to last year. I expect to see propane trade with crude for the next month or so, but we could start to see propane break away and fall once winter demand starts to diminish. The only caveat is that is crude goes on a rocket higher, propane will follow.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.
Jon Crawford – Pres.