I hope everyone had a wonderful and safe Labor Day weekend. Crude oil prices went on a roller coaster following the long weekend. The week started out with tumble as China announced retaliation tariffs along with economic pressures starting to creep into the US markets and Chinese data. But then a day later, China and the US announced a meeting and everything turned around! In addition, the Hurricane Dorian managed to miss the Gulf so no oil production will be impacted here in the US. But then, the big rally was dampened by the release of info that OPEC, particularly Russia, is not holding to compliance cuts. As prices started to relax, Yemen announced that they killed 30 Saudi’s in retaliation strikes today which caused crude to soar higher, coupled with large announced draws in US inventory. In addition, the US payroll data was fantastic and China revised their production data showing no contraction. But by the end of the day, crude oil prices finished flat with world economics and potential over supply still in play. What a roller coaster and a head scratcher! Crude has been trading with high volatility in a narrow $5/barrel range. This tells me that crude is ripe for a break out in one direction. Which direction is TBD! And by TBD, that means what news stores are discussed for the day! 🙂
In local retail news, gasoline prices have fallen below $2.49/gallon and were are five year lows for Labor Day. The lower prices were a nice relief on everyone who was traveling. Diesel prices continue to fall as Chicago economics continue to favor our market over the neighboring Group. However, I don’t expect to see diesel prices go any lower as refinery maintenance finishes and harvest season approaches.
Propane prices continue to remain low, low, low. The national inventory showed another large build and we are well on our way to breaking an inventory supply record this year. If there is no major corn drying demand event, early cold, or nasty winter, I expect propane prices to remain low all winter. Now next year will be a different story as additional exporting hubs and pipelines will be in full operation. So for now, enjoy the lower prices of this season! If you have not filled your tank to start the season, please do so!
As always, if you have any questions, comments, or concerns, please feel free to give us a call.
Jon Crawford – Pres.