The net long positions in crude continue to build for both WTI and Brent. Many traders are really holding on to OPEC’s compliance to cuts and the sanctions placed on Iran and Venezuela. In addition, there continues to be reports of progress on the China/US trade deal. Although the US rig count declined, production is staying strong. Refinery utilization is down due to the start of refinery maintenance season. Therefore we expect all four production quadrants East of the Rockies to experience supply/price issues over the coming months. As of right now, Chicago appears to be short on gasoline going into spring, so Chicago pricing is starting to disconnect from our neighbors in the Group. So for now, it’s still the bulls in charge. I expect to see current retail prices to only increase over the coming month or so.
In local retail news, gasoline retail prices continue to lag in comparison to cost. Some cities in the surround areas are advertising retail prices below cost of product. Retail prices on gasoline are ripe for an increase. Diesel retail prices will remain stable for some time as the #1 oil blending components start to fade out from winter treatment.
Propane prices are remaining stable as we finish up this winter. Propane production continues to be at record levels and shows no signs of slowing down. So far we are already seeing prices for next season to be very close to this season. Stability in price forwards is always nice for consumers. And there is also a good chance of lower prices for summer fills this summer. As a reminder, for all will-call customers, please keep an eye on your tank. This time of year, many people can forget about their tank as temperatures rise during the day but stay cool at night. 🙂
As always, if you have any questions, comments, or concerns, please feel free to give us a call.
Jon Crawford – Pres.