Good afternoon!
Nothing seems to stop the bulls from taking crude prices higher. The US Jobs report was better than expected so the fears around recession melted away. The FED continues to talk of lower rates and the US oil rig count continues to drop. In World News, Libya is experiencing turmoil which can affect oil exports, and Saudi Arabia announced that its largest oil field is producing much less than expected. And the US/China trade deal looks like “all systems go”. All-in-all, the data is showing high demand with robust economic indicators. However…. The US continues to produce record levels of crude with less rigs, showing that we are becoming more nimble and efficient. Russia is wanting out of the OPEC cuts and does not want to see the price of oil get much higher. And world demand continues to hang on every announcement. Basically, we are starting to enter price territory where price will affect world demand. In conclusion, as I have been saying, the ride up is not over yet, but I’m not so sure it will hold on for the rest of the year.
In local retail news, gasoline retail prices continue to hold around $2.69/gallon and diesel under $3.00/gallon. With the continued rise in crude prices, I don’t expect to see any downward movement in prices at the pump in the foreseeable future.
Propane prices are starting to drop and I expect to see prices continue the downward movement. We have only seen propane prices detach from crude price movement a few times in the the past, and it is happening now. Propane supplies are at record levels for this time of year and are only continuing to increase. In addition, exports are remaining robust and we expect inventory levels to continue to increase. Therefore, it’s not a question of “if” propane prices will go lower, it’s a question of “how low” propane prices will go. For now, we sit back and wait for summer fill prices to come out along with next season’s heating contracts.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.
Best regards,
Jon Crawford