Although news of unrest in the Middle East continues to ramp up in reporting from news outlets, the fallout from the trade war between the US and China is winning out on the battle to move crude oil prices. Crude oil prices have relaxed from last week highs and are now moving closer to the lower leg of recent support values. WTI is moving closer to $59/barrel which is the current floor. Today the EIA reported large builds not only in crude oil inventories but also in gasoline and diesel inventories. The builds were surprising considering that refinery utilization was low and crude production dipped just a bit. For now, as long as the temperature in Iran does not heat up anymore, crude prices are losing some support. In addition, hedge funds moved out of long positions and are now at the lowest ratio of long-to-short since last year. In other words, hedge funds are putting their money on cheaper prices later in the year. I gotta say that the first five months of this year has been one roller coaster of a ride for the crude oil markets!
In local retail news, Chicago spot prices finally fell back down in line with Group spot. I expect to see retail prices on gasoline continue to drop just a bit. I was not expecting to see a drop before Memorial Day, but I think the consumer will see a little relief. Diesel prices are holding more steady on good demand right now.
Propane prices continue to drop with large national inventory builds and a huge stockpile compared to last year. I don’t see propane prices falling off a cliff, but I think the current spot prices of propane will be here for quite some time this summer. If you own your own tank, retail prices are now under $1/gallon! If you can hold any propane I strongly recommend purchasing at these values! Contract prices for next season will be released closer to July 4th. Stay tuned for more info!
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