Good morning,
Well, the coronavirus is not getting any better. In fact, the virus has now infected 15k people and killed over 300. The first death outside of China was reported, and a few major US cities are reporting cases. China built a giant hospital in nine days (yes, nine days) to have beds on hand ready to treat. For now, the markets are very nervous. China is shutting down factories, US companies have closed operations, and travel/shipments are starting to stop. The virus could cause the world economy to grind to a halt while contagion is contained. With demand erosion on the horizon, crude prices have tumbled. WTI crude briefly traded below $49/barrel for the first time since last spring. OPEC+ is already planning an emergency meeting to try and keep crude prices from falling off a cliff. The US would actually not want prices to go much lower in order to keep production high and taking market share. For now, it’s time to sit back and relax until we know where we are heading with the coronavirus.
Local prices of retail gasoline and diesel continue to fall. Retail gasoline prices have fallen below $2.29/gallon and retail diesel prices are in the $2.70’s. I don’t expect to see prices move any higher in the coming weeks.
Propane prices continue to stay soft with warmer than average temperatures and high volumes of supply. As always, we like to have fun with our local groundhog, Jimmy The Groundhog from Sun Prairie. Jimmy did see his shadow on Sunday, so for what’s it worth, Jimmy is saying we will have six more weeks of winter. The forecast is continuing to call for average temperatures. For now, I think it’s safe to say that a major polar vortex is less likely to occur this year compared to years past.
As always, if you have any questions, comments, or concerns, please feel free to give us a call.
Best regards,
Jon Crawford