Well, the price floor carved out last week on WTI gave way under the announcement for tariffs in Mexico, coupled with a dramatic increase in US crude inventories this week. Much of the increase in inventories is being blamed on demand erosion in the Midwest from flooding. Farmers are almost 50% behind in most parts of the Midwest which greatly affects demand. Others are chatting that the EIA has reported false inventory numbers. Regardless, WTI Crude broke through the $52/barrel technical mark and fell to $50/barrel for a brief moment. The massive dive in crude prices has caused OPEC to up the talk around extending or increasing production cuts through the end of 2019. In addition, the trade war with China continues to spook traders on potential economic erosion in China and possible recession in the US. So then the FED announced this week that potentially a rate cut is on the table. The chatter from OPEC as well as discussion of a FED rate decrease is putting upward pressure on crude prices and possibly carving out a floor for now. I do believe that we have experienced a bottom in prices until the OPEC meeting on June 26th and 27th. So for now, sit back and watch as prices at the pump slowly come down!
In local retail news, gasoline and diesel prices are starting to slowly come down. I expect to see the downward trend continue into next week.
Propane prices have also stayed very, very low. We are now at the lowest price in almost five years. I recommend that everyone fill their tanks as soon as they can to take advantage of the current market condition. Contracts for next season will be out the first part of the July and will be lower priced than last year! It’s always nice when we can announce good news. 🙂
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