Crude prices went on a wild ride this week with a frenzy of information. Iran apparently tried to intercept another crude oil ship in the Straight of Hormuz. Iran is denying the accusation, but the UK is adamant that their navy fended of some of Iran’s Revolutionary Guard’s ships. Back at home, crude oil inventories decreased again by a whopping 8M barrels. Then the FED gave notice that rates cuts are back on the table causing the Dollar to drop in value, which increases the cost of crude. Then, the Gulf of Mexico is preparing for Tropical Storm Barry. Shut downs of crude harvesting in the Gulf were announced mid week. But then a big piece of bearish news came out of OPEC yesterday which stalled the rally. OPEC believes that oil demand will drop in 2020 and a potential for a crude oil surplus at current production levels is possible. And then forecasters lowered the potential destructive impact of Tropical Storm Barry. So we started the week back below $60/barrel crude on WTI and ended the week back above $60/barrel on WTI. Wild ride this week! As always, we will continue to monitor headlines and see where these recent developments take us next week.
In local news, I would prepare for higher prices at the pump. Gasoline costs have risen compared to the retail price. Most stations in our surrounding area are selling gasoline at or below cost. As we continue to hold higher costs, eventually retail will catch up. I expect to see 2.69-2.79/gallon on gasoline retail in the coming week. Diesel cost has increased as well and I expect to see diesel retail prices climb a little.
Propane prices have continued to remain very, very low. If you have not filled your tank for the summer, I recommend doing so sooner than later. We have also released our contract prices for the next heating season and can help you with choosing which option is best. Please call our office for more information.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.